The disproportionate impact of resource leakages on the poor and the vulnerable groups

The social service sector remains the cornerstone in resolving the underlying causes of poverty, inequality, deprivation and vulnerability in Zimbabwe. The obligation of the State to respect, protect and fulfil human rights depends on both the availability of state resources and the effectiveness of institutions charged with the provision of public services. It is, however one thing to mobilise resources and another to effectively deliver the public services. Though guaranteed by the constitution and legal frameworks, the needs, aspirations and rights of marginalised groups particularly women, children, people with disabilities and the elderly are not being respected in practice at the point of policy implementation. Despite the existence of specific fund accounts to cushion the poor and marginalised such as the Disabled persons Fund, National Rehabilitation Welfare Fund, Child Welfare Fund and Basic Assistance Module (BEAM),the excessive abuse and misuse of public resources have compromised the realisation of social and economic rights of beneficiaries of these fund accounts. The national budgets for Zimbabwe are largely characterized by a myriad of challenges emanating from a very narrow fiscal space, poor maintenance of accounting records, diversion of funds to non-intended purposes, paying for goods not delivered, improper accounting of asset records as well as overstating and understating of revenues and expenditures. Government Departments, local authorities and residents in Mutare met and convened to discuss the state of public service delivery in Mutare and propose possible fiscal policy reforms that are necessary for safeguarding public resources amid gross misconduct and abuse of resources by government ministries, local authorities and state owned enterprises under the auspices of the quarterly Public finance management Reform Indaba that was held at Holiday Inn Mutare on 4 September 2019. The third series of this Reform Indaba paid keen interest into the findings of the 2018 Auditor General’s report which revealed serious leakages and a betrayal of ordinary citizens by government institutions and individuals that are entrusted with the safeguarding of public funds and property as clearly outlined in Section 308 of the Constitution.

Participants to this Indaba reflected on the implications of resource leakages on social and economic rights particularly the rights of women, children, elderly and people living with disabilities as provided for in Section 80-83 of the Constitution respectively. The far-reaching consequences of such abuse compromise the ability of the state to realise both national development goals and the broader Sustainable Development Goals which the country committed to at the global level in 2015. Of major concern to Mutare residents was the paradox of plenty in Manicaland in which the diamond rich province is one of the poorest provinces in the country with poverty level of 71.8%. It is also ironic to note that despite the exorbitant charges on council rates, public service delivery remains poor as evidenced by high cost in transport, shortage of decent accommodation in high density suburbs such as Sakubva and Dangamvura, unavailability of public toilets, poor state of roads, and shortage of portable water. This ensued after the presentation of the findings of the Auditor General’s report which revealed damning revelations of gross levels of corruption and poor governance within Mutare City Council characterised by failure to submit timely audited financial statements, no supporting documents for expenditure amounting to $1 174 325 and that 67% of the Council’s treated water (22 677 156 cubic meters) was not billed as it was lost mainly due to leakages, non-metered connections and accounts not created in the system. The situation was worsened by the fact that the Council had 15 872 non-functional water meters.

The Indaba which further interrogated the irregularities in central government, other local authorities and state-owned enterprises made specific recommendations as follows;

· Parliament of Zimbabwe through an Act of Parliament must guaranteed the protection of Fund Accounts especially those that are meant for supporting vulnerable groups such as children, elderly, people with disability as well as beneficiaries of the National Drought Fund and the National Rehabilitation Centres Welfare Fund.

· There is need for building strong citizen movements to demand transparency and accountability as well as to promote citizen participation in public finance management system.

· Parliament should expedite the alignment of the Public Finance Management to the Constitution in order to enforce mechanisms for continuous monitoring of public resources and provision for redress during implementation of the budget rather than waiting for the Auditor General’s report.

· Mechanisms and frameworks must be put in place to enhance the collaborative work of the office of the Auditor General and Anti-Corruption Commission. This would further increase the scope of the Auditor General work in terms of following up on actions taken on institutions and individuals who would have abused resources.

· Come up with an Act of Parliament that protects Fund Accounts especially those that are meant for supporting vulnerable groups such as children, elderly, people with disability as well as beneficiaries of the National Drought Fund and the National Rehabilitation Centres Welfare Fund.

· Parliament of Zimbabwe must guarantee operating space and legal freedoms required by civil society organizations to engage in advocacy and activism on the basis of the audit findings.

· The Ministry of Finance and Economic Development should come up with a comprehensive programme for strengthening institutional capacities in state owned enterprises, local authorities and government Ministries including tailor made trainings on revenue management, contract management, financial reporting and procurement.

Xenophobia attacks in South Africa – As Zimbabweans try to make ends meet on the other side of Limpopo

Introduction

There is a famous English adage which goes “Home is the best.” If home is the best, then what has become of our fellow Zimbabweans in South Africa? Why did they leave home, Zimbabwe, which is the best, only to witness their rights being abrogated left, right and centre by fellow Africans on the other side of Limpopo? A lot of questions might be asked surrounding Zimbabwean immigrants in South Africa but there is one thing for sure, Zimbabweans who find themselves stationed in South Africa, most of them have never dreamt of making South Africa their second home. This past week, both mainstream and social media platforms were awash with alleged pictures and videos depicting attacks on foreign nations by South Africans. However, whether the attacks are justifiable or not is a question for another day. Zimbabwean citizens have lost human dignity and personal security as guaranteed by section 51 and 52 of the Constitution of Zimbabwe respectively due to the push factors that drove the fellow countrymen and women down south. As the world looks up to the South African Authorities to make resolve of the current happenings in the neighbouring country, the Zimbabwe Government has a responsibility to create opportunities for its people not only based in South Africa but world over. The truth be told, the majority left the Zimbabwe due to the macroeconomic challenges that the country is facing dating as far back as early 2000. The Zimbabwe Coalition on Debt and Development believes that as a people, there are plenty of opportunities for switching on the economic fortunes for Zimbabwe that are necessary to attract back fellow Zimbabweans who leave as economic refugees in other countries. The immediate being the urgent need to address corruption and inefficiencies associated with poor economic governance in Zimbabwe. At the rate at which the country is falling into another recession, ‘home” will not be a better place for many with the majority failing to put food on the table amid high inflation, wage erosion, high unemployment and lack of economic opportunities for young people, relegating the majority poor and marginalised into in our society into worse off positions.

Connecting the dots

Whilst migration both at regional and international level is not a new phenomenon the world over, individual and massive displacements or migration of people are necessitated by a number of factors which range from natural disasters, war, conflict and economic challenges. Nevertheless, according to the 2018 World Migration Report, of all the major drivers of immigration, economic challenges affecting individuals in countries of origin tops the list. The economic challenges currently bedevilling the country have forcibly displaced Zimbabweans with the majority targeting the neighbouring South Africa. There is a widely believed view that Zimbabwe was once “the bread basket of Africa”, whether that was true or not it’s something else, but if one takes a closer look at Zimbabwe’s current socioeconomic outlook, one wonders if the Southern African nation ever became the breadbasket of Africa.

Zimbabwe’s economic recession was born at the start of the millennium that is 2000, however there are a lot of theories surrounding the major causes of the country’s economic meltdown. In some quarters, Zimbabwe’s economic crisis is rooted in the political crisis, in others the macroeconomic challenges stem from policy inconsistencies whilst it is the governments’ stance that the country’s economic meltdown has been necessitated by sanctions imposed on the country by the Western powers following the land reform programme. Whilst one cannot endorse or refute these claims, the article is looking at how the current economic challenges stem from purely economic structural issues with specific focus on poor economic governance especially poor public resources management. According to the Corruption Perception Index by Transparency International, Zimbabwe is one of the most corrupt countries ranking 160 out of 180 countries.

The alleged crackdown on foreign nationals in South Africa is understood to be rooted in the locals’ discontentment with how the immigrants are grabbing economic opportunities for the locals. It is critical for one to note that unlike Cyclone Ida which was a natural disaster, the conflict that erupted in South Africa is a man-made crisis that could have been abated. The conflict is a clear reflection of how gross poor economic governance can breed conflict both at home and abroad. How? The control over resources and access to opportunities have the potential to either foster peace or give birth to instability. However, conflicts born out of the need to access and have control over resources is not only manifesting itself in South Africa through the xenophobic attacks, the open conflict between the miners and the communities in Chiadzwa, Zimbabwe, bears testimony on how poor economic governance breeds conflict. At the continental level, Nigeria’s oil-rich southern delta region has witnessed continued clash among local residents, the military, police and other groups which have seen loss of lives. If Zimbabwe’s economic cogs were fully functional, Zimbabweans wouldn’t be found at the centre of conflict in South Africa. Zimbabwe’s challenges have never been due to lack of public resources needed for economic development, rather the problems stem from lack of effective public finance management.

The Public Finance Management Reform Indabas held by the Zimbabwe Coalition on Debt and Development bare it all that Zimbabwe’s public finance management is marred by poor accounting records in some ministries and government departments, abuse of public funds, lack of transparency and accountability and continuous violation of legal and constitutional provisions. This is further substantiated by the 2018 Auditor General’s Report that made damning revelations on fraud, corruption, unaccounted funds, misstatements of financial statements, non-compliance of procedure among a cocktail of gross financial malpractices in public funds management. Abuse and mismanagement of public funds is rampant in state owned enterprises prejudicing the nation of millions of dollars. The Zimbabwe National Roads Administration Authority (ZINARA) is a case in point on how public finances are grossly mismanaged in Zimbabwe. Zimbabwe’s current economic challenges cannot therefore be divorced from the rampant corruption and abuse of public funds prevalent in the public sector. Corruption is slowing down the pace of Zimbabwe’s national economic recovery as it siphons public resources thereby diminishing the country’s prospects for development.

Conclusion

In order to resolve the macroeconomic challenges faced by Zimbabwe, there is need for serious consideration and implementation of the recommendations proffered in the Auditor General’s Report to ensure efficiency and accountability towards national development to be realised. The xenophobic attacks in South Africa should serve as a wake up call for both SADC and the African Union on the need for the two blocs to seriously deal and resolve poor economic governance in member states. In executing its mandate of mediating in the affairs of member states that face instability, the SADC Regional Organ for Politics, Defence and Security should establish the nexus between economic governance and peace. This is due to the fact that as exhibited in xenophobia in South Africa, poor economic governance spell detrimental effects on both the country of origin and the migrant recipient country and has the potential to destabilise both the region and the continent.

Empowering social actors in Matabeleland for Social Accountability Monitoring in Public Finance Management: A case of Bulawayo Capacity Building Workshop for RAs and SEJAs.

The Zimbabwe Coalition on Debt and Development (ZIMCODD) conducted a capacity building workshop for Residents Associations (RAs) and Social and Economic Justice Ambassadors (SEJAs) on Strengthening Transparency and Accountability in Public Finance Management (PFM). The training was held under the theme, “Influencing legislative and institutional reform for improved public finance management in Zimbabwe.” The workshop drew participants from Hwange, Lupane, Gwanda and Bulawayo. The capacity building workshop focused on key topics including understanding PFM and the budget cycle in Zimbabwe, social accountability in the context of devolution, lobby and advocacy in public finance management and community mobilisation for social accountability. The training was both an eye-opener and a platform for dialogue around PFM discourse where RAS representatives and SEJAs raised critical issues pertinent to prudent public finance management.

The training raised consciousness on the importance of PFM by highlighting that effective PFM ensures aggregate fiscal discipline, operational efficiency and allocation efficiency. Furthermore, PFM creates stronger states, reduce poverty, ensure gender equality and balanced growth, instils public confidence and trust. PFM gives room for monitoring and evaluation of how public funds are expended. The workshop emphasized the role of community mobilization and advocacy in PFM oversight and the actual attainment of effective public finance management for national development. The training recognized that Section 298, 299, 300 and 301 of the Zimbabwe Constitution are key tools that influences PFM advocacy. With the realization that social accountability is the missing link in Zimbabwe’s democratic accountability spectrum, the implementation of devolution calls for an active citizenry empowered to exercise oversight role in PFM, ZIMCODD, through this workshop bridged the gap by building and strengthening citizen led advocacy in PFM.

Key issues raised by participants include but not limited to PFM framework as a fundamental tool to monitor public funds under devolution to ensure that public funds are safeguarded at local level, solidarity in demanding transparency & accountability in PFM is vital, communities should set aside their political differences for development to take place because PFM issues affects everyone, enabling citizens to demand value for money from duty bearers through social accountability is critical since citizens are the core contributors of public funds, there is a growing deficit between citizens and policy makers which exacerbated by monetary policy inconsistencies, the recently introduced SI142 is marred with ambiguity and throws citizens into confusion, and corrupt activities must be criminalized as corruption by senior officials is scaring away investors.

Citizens were therefore encouraged to conduct social audits of budgets from a socioeconomic perspective to ensure that expenditures reflect the socioeconomic outlook of citizens. Communities were urged to come up with alliances and assist each other on monitoring procurement processes and be active to question contractors in their areas.

Deplorable state of service delivery: A thorn in flesh for Mutare residents

A capacity building workshop was conducted by ZIMCODD on 18 July 2019 under the theme “Influencing legislative and institutional reform for improved public finance management in Zimbabwe.” The workshop which had a total of 62 participants drew participants from Residents Associations (RAs) and Social and Economic Justice Ambassadors (SEJAs) with the focus being on strengthening transparency and accountability in Public Finance Management (PFM). The training was a platform for dialogue around the PFM discourse where RAs representatives and SEJAs tabled critical issues around service delivery which is closely tied to prudent public finance management.

Whilst social service delivery in Zimbabwe is the mandate of the central government as well as the lower tiers of government i.e. provincial and local councils, residents in Mutare lamented the deteriorating service delivery which is in violation of Chapter 4 of the national Constitution. Mutare residents learnt that as citizens they, by default, enter into a social contract with the government as they contribute to the national fiscus through paying taxes, rates and fines. It is on this social contract that demanding social accountability by citizens is buttressed. Thereafter, Mutare residents expressed keen interest on understanding the budget cycle and how to tap into such processes as citizens; they questioned where the taxpayer’s money go; how much the Mutare City Council receives under devolution and how that money is expended; how the Community Development Fund is expended and accounted for in their constituencies; the expenditure tracking tools used by local authorities in PFM; why the Office of the Auditor General’s recommendations are not being implemented; and consequences for the abuse of public funds. Citizens bemoaned abuse by the city council as they are being charged for services they are not enjoying in the face of poor health and sanitation services. They also bemoaned paying development levy whilst there is no development taking place. The deteriorating service delivery was attributed to violation of basic governance principles which jeopardizes prudent PFM and a corrupt police force perpetuating crime.

The training raised consciousness around the principles governing PFM as codified in Section 17 of the national Constitution. Discussions emphasized the role of community mobilization and advocacy in PFM. The training recognized that Section 298, 299, 300 and 301 of the Constitution are key tools that influences PFM advocacy. Furthermore, the training also recognized that the implementation of devolution calls for an active citizenry empowered to exercise oversight in PFM.

To contextualize that advocacy works in fostering social accountability, the United Mutare Residents and Ratepayers (UMRRT) shared a success story on different advocacy tools they used to influence responsive social service delivery by the Mutare City Council. These include rates boycott and creating a parallel UMRRT bank account collecting rates from residents until the city council put in place accountability systems; successfully lobbying for the appointment of Public Relations Officer as a permanent port of call for residents’ engagement with council and obtaining key public information from the council; and, conducting a social audit of the council with some of its the key recommendations being taken up including the lobby for an increase capital expenditure budget from 0.1% to 25%.

Effective Social Accountability: A Jump-Starter for Non-Responsive Authorities

The social contract that exists between the government and its citizens mandates the later to engage in social accountability at both national and local levels in order to hold duty bearers accountable for their actions in protecting citizens’ rights using public resources. Social accountability refers to the various initiatives that citizens engage in to demand for transparency and accountability from public institutions and officials.

Citizens agree to forego some of their rights and freedoms and submit to their authorities in exchange for the protection of the remaining rights. John Locke says the only right given up is the right to punish other people for violating rights. The illustration below explains the social contract that exists between citizens and the state.

Source: https://blog.supplysideliberal.com/post/2018/6/17/the-social-contract-according-to-john-locke

If the state is put in power, the hope is that citizens’ rights will be guaranteed. However, if the authorities misuse power and does not action the right to punish those who violate other people’s rights, citizens have a right to intervene to such. The intervention, which is a ‘carrot’ rather than a ‘stick’, is meant to complement government efforts and/or lack thereof in protecting citizens’ rights.

Social and Economic Justice Ambassadors (SEJAs) and Residents Associations (Ras) from Harare converged at a local hotel for a Social Accountability Capacity Building Workshop facilitated by the Zimbabwe Coalition on Debt and Development (ZIMCODD). Zimbabwean authorities at both local and national level are less and in some instances non-responsive to citizens’ needs as witnessed in the current decay of social services delivery which is in violation of citizens’ social and economic rights enshrined in the Constitution of Zimbabwe. It can never be over-emphasised that residents need to unite, mobilise and organise themselves and challenge the status-quo in order to address the rot as exposed by the Office of the Auditor General’s 2018 Report. The report exposed both citizens (for not effectively executing their social accountability role) and the authorities (for failing to protect citizens’ rights in respect of the social contract).

The participants highlighted that they had tried their level best to hold duty bearers accountable at both local and national level but faced resistance of the highest order. Resistance came in form of non-disclosure of information by public institutions and officials, banning of protests, continued mis-use of public funds and refusal to engage in dialogue with residents among others.

Despite the resistance, residents agreed to continue and up their social accountability role through various initiatives within the confines of the law and be found on the right side of history. Some of the initiatives proposed include use of Community Score Cards for social service delivery and budget allocations, participation in budget consultations, alternative/shadow budgets by citizens, public expenditure tracking surveys, social audits, conducting demonstrations if issues are not addressed by duty bearers, litigation with facts, petitioning, interface with duty bearers and procurement monitoring.

Piling pressure on duty bearers to account for their actions by massive and organised citizens is believed to be one of the best ways authorities will honour the social contract and commit to the protection of citizens’ rights as well as punish those that engage in actions that result in violation of other people’s Constitutional rights.

The Auditor General’s 2018 Report – A reflection of how citizens are prejudiced of their socioeconomic rights

Despite the clarity of Chapter 17 of the Zimbabwe’s Constitution in the protection of public funds, the 2018 Auditor General’s Report revealed shocking figures of missing and unaccounted for taxpayers’ money. The money earmarked for development but never reached the intended beneficiary, with some money never disbursed to relevant ministries further impoverishing citizens. Accordingly, it is the duty of the state to promote, protect and fulfill the rights of its citizens. Nevertheless, a Constituency Indaba held in Mpopoma-Pelandaba revealed otherwise as communities in this day and age are still using public toilets in the midst of water shortages. These toilets are in a dilapidated state, further to that, some public toilets have been closed due to lack of funding for cleaning services. Furthermore, beer halls and other social amenities which were revenue sources for the council have been privatized and are now turned into night clubs.

The question is “Why is the council failing to sustain and manage its properties given the vast sources of income? lminyela is one of the oldest suburbs in Bulawayo which was initially an army barrack characterized by single quarters. As years went by, the houses were donated to the City of Bulawayo for occupation by residents initially for single families. According to the city bylaws then, when families grew they were moved to suburbs that accommodated more family members. However, as the population and the demand for housing increased, the economic situation deteriorated, the population grew and outgrew the ablution services provided. This has left communities in a dire situation having to share toilets and bathrooms despite that fact that this puts communities at risk of cholera and any other diseases borne out of erratic water cuts. Efforts to decongest the area have been fruitless since housing projects continue to be privatized and unaffordable for the general citizenry. Some residents of Iminyela and Mabutweni reported that they have been on the housing list since1980 but have not benefited to date they are still paying annual housing list subscriptions. .”Pelandaba west community which was initially slated to decongest the Iminyela and Mabutweni was sold to a private housing developer”, one resident said. Residents demanded accountability for their money they have been paying whilst waiting for houses.

Residents also fumed against the mismanagement of funds and flouting of tender processes as the main causes of delayed development and called for monitoring mechanisms on public resource utilisation. Mabutweni residents argued that Parliament has failed to protect the taxpayers’ money earmarked for development hence there is need for citizens to stand up and demand accountability for their hard earned money.

Action Points

Council to prioritise the right to water and sanitation in Mpopoma-Pelandaba Constituency.
Councillors to follow up community retention fees from recreational facilities in the constituency.
Government to restore the feeding schemes at schools as most families continue to lose jobs due to the harsh economic situation.
Government to have a deliberate policy on protection of the housing list.

Gweru Residents take Local Authority to Task over AG’s Report

Gweru City Council has said corrupt officials and central government are to blame for poor and substandard service delivery to residents and has promised to change the structures and systems in managing public finances.

Speaking at a Public Finance Management Reform Indaba facilitated by the Zimbabwe Coalition on Debt and Development (ZIMCODD) in Gweru on the 9^th of August 2019 to deliberate on the findings of the 2018 Auditor General’s Report, Gweru City Council Mayor, His Worship Josiah Makombe, who is also the President of the Urban Councillors Association of Zimbabwe, said local authorities are not operating well and sanity is needed urgently even at central government level to ensure transparency and accountability in the management of public funds. He added that if the government would politically commit to decisively curb corruption by promoting principles and practices of efficient public finance management, then there would be efficient social services delivery. Gweru City Council Chairperson, Clr. Albert Chirau, echoed the same sentiments saying corruption and poor quality services starts at government level and should be addressed from there to make it efficient to tackle the same at local level as the same central corrupt system has penetrated local authorities crowding out local decision makers from the affairs of the authorities.

His Worship Makombe emphasised that corruption was endemic in our society and has contributed to the demise of efficient service delivery at Gweru City Council and he promised that the current council will not be accomplices in depriving citizens of their rights through corrupt tendencies. For this reason, the Gweru City Council formed the Committee of Inquiry on Service Delivery to look at ways of improving the quality of service delivery in Gweru, reflect from past experiences and practices and came up with recommendations and timelines. Stakeholders were shocked to hear that Gweru City Council owes Zimbabwe Electricity Supply Authority (ZESA) an estimated US$29 million compared to the US$14 million pointed out in the 2018 OAG’s Report. The City Council also owes a total of US$861,136 to Zimbabwe National Water Authority (ZINWA) and US$652,777 in statutory fees to the Zimbabwe Revenue Authority (ZIMRA). There are no supporting documents for salary creditors amounting to over 14.6 million.

Gweru Urban Member of Parliament, Hon. Brian Dube, said that the empowerment and autonomy of local authorities would only be attained through the just and fair implementation of Section 14 of the Constitution which speaks to devolution. He also added that,

“The crippling of Gweru is due to corrupt mechanisms in the allocation and disbursement of funds. The Members of Parliament for Gweru intervened as policy makers to get US$440,000 from government for the purchase of water pumps to ensure improved water supply in the city. As duty bearers, we call upon and lobby for a performance measurement framework in public institutions to ensure sound public finance management system.”

The Director for Gweru Residents Forum, Charles Mazorodze said that systematic challenges at GCC are affecting service delivery. He specifically highlighted that over US$775000 was diverted from servicing residential stands in Mkoba 21 to paying salaries and allowances to council workers, according to the OAG’s Report. On the broader national context, the 2018 OAG’s Report unearthed gross misuse of public finances especially non-supported transactions by local authorities, parastatals and ministries. It was recommended that Gweru City Council commit to the implementing the recommendations provided for by the Commission of Inquiry on Social Services Delivery as well as capacitate the established District Development Committees to ensure that the province is ready for effective implementation of devolution mandates.

Corruption – A cause for concern in Zimbabwe’s public finance management

In Zimbabwe, Public Finance Management (PFM) is marred with inconsistencies in the legal frameworks, absence of effective parliamentary oversight, lack of autonomy by auditing institutions, growing fiscal leakages, lack of transparency and accountability, lack of compliance to legal and constitutional provisions and meaningful participation. It is against this background that the Zimbabwe Coalition on Debt and Development (ZIMCODD), convened PFM Reform Indabas in Mutare, Gweru, Bulawayo and Harare to advance the legislative and institutional reforms for public finance management in Zimbabwe through increased interaction between Members of Parliament, councillors, mayors, government representatives, opinion leaders and civil society. The gist of the Indabas was to interrogate the current PFM laws in relation to Chapter 17 of the Constitution of Zimbabwe Amendment No. 20 of 2013 with specific focus on the review and alignment of the PFM Act [Chapter 22:19] with the Constitution of Zimbabwe. The participants offered policy alternatives for promoting efficiency, transparency and accountability in public finance management, propose reforms to the laws, rules, systems and processes for mobilising revenues, allocating public funds, undertake public spending and account for funds as well as acting upon the findings of the national audit.

Nevertheless, any poll on determining the most discussed issue during the Indaba, would easily pick corruption as the ultimate winner because most of the issues raised in relation to the alignment of the Public Finance Management Act to the Constitution referred back, either implicitly or explicitly to how the Act should speak to the supreme law in addressing corruption in PFM. Participants vehemently indicated that corruption has now become a “cancer that calls for divine surgery” in Zimbabwe such that stringent measures and actions should be taken to uproot this enemy of progress.

Sections of the PFM Act which require alignment and/amendment

Section 7 of the PFM Act should be amended to allow the Minister to manage national revenue in consultation with Parliament;
Section 2 of the PFM Act should be amended to allow for parliamentary approval before writing off loans extended to finance fund accounts;
Section 14 of the PFM Act should be amended to stop the accounting officer from complying with the Minister’s payment directives on costs that are not allowable;
Section 18 of the PFM Act should be amended to reduce the Minister’s powers on the establishment of statutory funds;
Section 15 of the PFM Act should be amended to compel the Minister to explain, before the relevant Portfolio Committee, his failure to provide annual reports and financial statements on the stipulated due dates;
The PFM Act should be clear in ensuring that financial reports adhere to the International Public Sector Accounting Standards;
The PFM Act must provide for punitive and deterrent measures against abuse of public funds;
The PFM Act must empower institutions responsible for overseeing public funds management, like the Office of the Auditor General, to have authority to take legal action against those who do not pay heed to their recommendations;
The PFM Act should incorporate provisions relating to the allocation of not less than five (5) percent of national revenue to provincial and local tiers of government. The obligations of local authorities to submit annual budgets and financial performance reports to the government, Auditor General and the Parliament of Zimbabwe should be clearly articulated in the PFM Act.

The PFM Act must be amended to give citizens enough time to contribute meaningfully to local and national budget formulation processes;
The PFM Act should incorporate comprehensive PFM principles including prudence, equity, economic use of resources, effectiveness, and being pro- marginalised groups as enshrined in the Constitution of Zimbabwe;
The PFM Act should clearly spell out how access to information by citizens will be strengthened under devolution to ensure that citizens sufficiently carry out their social accountability and oversight role;
The PFM Act should be deterrent enough to stop the government from borrowing for consumptive instead of productive purposes.
The PFM Act should clearly explain national development, useful and necessary expenses as well as fruitless and unnecessary expenditure in order for the government to be held accountable.
In Zimbabwe, there are no well spelt consequences for non-compliance to PFM provisions by responsible authorities, the Ministry of Finance and Economic Development included. The PFM Act should therefore provide for deterrent measures and actions to be taken against non-compliance.

Issues raised and Recommendations

The national Constitution should be translated into all indigenous languages for it to appeal to diverse citizens. This is important in ensuring that citizens to participate national budget processes from an informed position.
The whipping system in Parliament of Zimbabwe is undermining the institution’s role in PFM and should therefore be revoked to allow for Members of Parliament to fully represent the interests of the electorate not just their political parties.
People living with disabilities are not well recognised in society to the extent that crucial meetings such as budget consultations are conducted in venues which are not accessible to people with disability, thereby excluding them from participation. Participants at the PFM Indaba called upon Parliament and the relevant authorities to ensure that Bills are available in format that is palatable to the deaf and blind to ensure their participation.
Transparency, accountability and political will are critical in strengthening the management of public finances and should be embodied in the Public Finance Management Act as provided for in the Constitution, Section 298.
Revenue raised nationally must be shared equitably between the central government and provincial and local tiers of the government.
Recommendations from the Auditor General (AG)’s office are never implemented despite their accuracy. The AG should therefore report directly to Parliament.
Corruption is rampant in Zimbabwe’s PFM and the successive Auditor General’s reports since 2015, highlights continuous violation of procurement procedures in government departments, local authorities and state owned enterprises. In most cases, service providers are paid for goods and/or services that are never delivered by suppliers in violation of section 315 (2) of the constitution which require all state contraction process to ensure transparency, honesty, cost effectiveness and competitiveness. There is therefore need for deterrent and stringent measures (penalties and fines) against corruption and primitive accumulation in order to safeguard public resources. More so, Section 81 of the PFM Act should be amended to incorporate provisions on audit of all provincial and metropolitan councils.
Zimbabwe has a weak auditing system that promotes bad governance where internal auditors report to the management in the same institutions which compromise the audit results. The PFM Act should strengthen and remodel the internal auditing system supported by accountability system. Internal auditors should not report to the authorities of the entities they are auditing.

Zimbabwe’s Macroeconomic Challenges: Is Austerity the Solution or the Problem?

Understanding Austerity Measures

Ivan (2017) defines austerity measures as a set of economic policies set up by the government to deal with a country’s fiscal deficit and debts through cutting of government expenditure (salaries, allowances) and increasing government revenue (tax, toll fees etc). Whilst some economists view austerity as a necessary instrument for reducing budget deficits and improving the long-term economic performance of national economies, others think that it worsens macroeconomic performance due to falling disposable incomes/aggregate demand leading to lower economic growth. This ultimately leads to lower tax revenue which may even offset the improvement from spending cuts. The implications of Austerity measures are more acute and visible among the poor and marginalised who rely on social safety nets.

Is Austerity the Solution or the Problem?

Broadly austerity measures are implemented to give investors greater confidence about the long-term performance of an economy. The level of country’s indebtedness determines investors’ perceptions and the government ought to lower debt levels in order to encourage the private sector to invest. The government policy “austerity for prosperity” for Zimbabwe is underpinned by the need to decisively deal with fiscal imbalances and strengthening the international re-engagement, clearance of debt arrears and investment promotion. The austerity measures were also introduced against a background of excessive borrowing from the domestic market which saw government overdraft at the RBZ alone rising from US$1.4 billion in December 2017 to US$2.5 billion by September 2018 in violation of Section 11(1) of the Reserve Bank Act [Chapter 22:15], which states that borrowing from the Reserve Bank shall not exceed 20% of the previous year’s Government revenues at any given point. Total expenditures for January to September 2018 was US$6.5billion against a target of US$4.1billion leaving a huge budget out turn of US$2.4 billion which was financed by issuance of Treasury Bills and recourse to the overdraft facility at the Central Bank. Such excessive borrowing was also criticised for crowding out private sector. The government’s decision is also based on countries that have successfully implemented austerity measures such as Canada in 1993-1996 where it cut fiscal deficit and still maintained strong economic growth. However, it is worth noting the differences in the initial conditions in which the austerity measures were implemented. In the case of Zimbabwe, austerity is being implemented at a time when the country is already in a recession. History has it that Austerity policies implemented during the Great Recession resulted in slow recovery in several European countries by reducing GDP, inflation, consumption, and investment. Efforts to reduce debt through austerity in the depths of the economic recession were counterproductive^[1]. The government should note that Canada’s deficit reduction was successful because it could loosen monetary policy, devalue exchange rate and benefit from strong export demand to United States of America and rest of world. In the case of Zimbabwe, however, the weak economy cannot support the austerity measures. Whilst the Canadian economy relied on its exports, Zimbabwe’s export base is very weak following 2 decades of deindustrialisation which saw Zimbabwe registering a current account deficit, of US$399 million between January and May 2019.

The challenges affecting Zimbabwe are not just about deficits; it is about corruption, abuse of state funds, weak institutions, violation of borrowing limits and failure to set priorities amongst government programmes as reported by the Auditor General in her 2018 OAG’s report. Until and unless the government comes up with deliberate policies for redressing the broader macroeconomic challenges, austerity measures will result in low growth and high unemployment.

The austerity measures have fallen short of interventions for redressing the current socio-economic crisis bedevilling the economy which is exacerbating poverty, vulnerabilities and economic trauma amongst the citizens especially the price distortions prior and after the introduction of the foreign exchange market in February 2019 and the recent abandonment of a multi-currency regime through IS142 of 2019. Whereas the government is claiming that the country registered economic growth during the first half of 2019, there is a visible decline in the living conditions of citizens.

Citizen’s Response

The austerity measures being implemented in Zimbabwe are imposing negative economic, social and political wellbeing of citizens in Zimbabwe. This is exacerbated by the fact that citizens only interfaced with the policy at the point of implementation without their input. The lack of ownership by citizens has made them to view the austerity policy as a stick rather than a carrot to complement government efforts to bring back the economy on track. The cut in government spending is being matched by an increase in the general prices of goods and services. This is leading to depressed consumption and overall economic growth. Social unrests which were experienced in the country since January 2019 are not peculiar to Zimbabwe. Since most austerity measures target developmental and social spending, social unrest is one of the most common after effects of austerity implementation. Wherever austerity measures are put in place by the government, citizens have always taken to the streets to demonstrate or protest against implementation of such painful and unfair set of policies. For instance, Greece saw a number of violent protests to measures undertaken in 2011 and 2012. Most famous anti-austerity protests were organised and done by Greeks. The popular movement was popularly known as the Indignant Citizens Movement. The movement was meant to convince the government to cancel a memorandum they had signed with the International Monetary Fund (IMF). The protests which ran for several months was joined by other foreign missions which included the Tunis, Argentines and Hungarians calling for cancellation of the memorandum and removal of austerity measures. The state of public service delivery mainly in the health sector, education, water and sanitation in Zimbabwe in itself is triggering such protests against price increases, high fees, tariffs and charges by the government.

Where From Here?

In the remaining few months to December 2019, the government should undertake a comprehensive monitoring and evaluation exercise on Austerity measures in order to inform the next policy cycle. This entails taking stock of the objectives and outcomes outlined in the 2019 National Budget which assured citizens that austerity measures will redress the budget and current account deficits within the shortest possible time period, not exceeding 12 months. The evaluation must be based on people’s views and progress in the broader sustainable development discourse not just economic growth. Fiscal deficit and the debt question should therefore be viewed as part of the broader socio-economic challenges inherent in our country. The government should, therefore coordinate social, economic policies that address the structural policies whilst safeguarding the rights of vulnerable groups through social safety nets.

ZIMRA Surpassing Revenue Collection Targets: Understanding the Dynamics

The tax collector reported a 118.71% increase in revenue collections during the first half of 2019. During the first six months, the Zimbabwe Revenue Authority (ZIMRA) collected ZWL$5.27 billion against a target of ZWL$4.3 billion thereby surpassing the 2018 first half collections of US$ 2.4 billion. This is largely attributed to the Intermediated Money Transfer Tax of 2% which grew by 7717%, Pay As You Earn (59.4%), Corporate Income Tax (62.2%), and Value Added Tax on Imports and Exports (140.9%).

However, there are a lot of distortions associated with the introduction of an exchange rate between the USD and the RTGS dollar in February 2019 and the monetary policy transition from multiple currency regime to the use of the Zimbabwe dollar as a local currency introduced under SI 142 of 2019. It is therefore unrealistic that ZIMRA is comparing revenue targets set in USD against actual collections in Zimbabwe dollars without considering the exchange rate factor. It would only have made economic sense for the revenue authority to standardise the base currency for comparable purposes. Based on an average exchange rate of US$1: ZWL$5 (as at 30 April, 31 May and 30 June 2019), the ZWL$5.27 billion is equivalent to US$1.1 billion against a target of US$4.3 billion, in which case, the tax collector instead missed the revenue target by 74%.

Furthermore, the Ministry of Finance and Economic Development deliberately maintained the US$ based tax tables after the floating of the exchange rate such that people’s disposable incomes were eroded excessively. Based on the current Reserve Bank of Zimbabwe mid-rate exchange rate of US$1: ZWL$9.2, the minimum tax threshold has been reduced from US$350 to US$38. This implies that a person who earns an equivalent of US$39 is now being taxed in Zimbabwe. It is unfortunate that ZIMRA is attributing the increase in Pay As You Earn collections to measures being implemented to levy PAYE in foreign currency. This practice entails converting individual foreign currency earnings to local currency for tax purposes after which the remittances are made in foreign currency. This is basically an unfair tax practice resulting in people shifting from one tax bracket to the other without an increase in wages and salaries. As the exchange rate between the US$ and the ZWL$ continue rising, people’s disposable incomes continue dwindling, making it impossible to plan on their salaries.

In terms of the missed target on Value Added Tax on local sales, it is critical to take into cognisance that as a net importer, imports of basic commodities continue flooding the market. Whilst this has had a positive impact on Customs Duty and VAT on Imports, the balance of trade in Zimbabwe is unhealthy. On the other hand, Value Added Tax on local sales performed below target as the prices of basic commodities continue skyrocketing against eroded disposable incomes. This has negatively affected people’s consumption patterns and ultimately Value Added Tax on local sales.

Having noted the above, ZIMCODD recommends the following:

ZIMRA, in consultation with the Ministry of Finance and Economic Development must harmonise the revenue targets and the actual figures in line with exchange rates on foreign exchange market in order to address the current macroeconomic distortions. Furthermore, the tax agency must standardise the base currency for comparison purposes.