US embassy cable - 02HARARE1737

UNCLAS SECTION 01 OF 05 HARARE 001737 
 
SIPDIS 
 
AA/DCHA RWINTER 
DCHA BGARVELINK, KSCHULZ 
AFR/SA MWILLIAMS, MCOPSON 
AFR/DP RBUCKLEY 
AF/S MBELLAMY, SDELISI 
NSC JFRAZIER, EABRAHAMS 
 
 
E.O. 12958: N/A 
TAGS: EAID, EAGR, PGOV, ZI 
SUBJECT: BUDGET MEETING OF THE PARLIAMENTARY 
         PORTIFOLIO COMMITTEE FOR LANDS AND 
         AGRICULTURE 
 
 
SENSITIVE BUT UNCLASSIFIED 
 
- - - - 
SUMMARY 
- - - - 
 
1.  (SBU) USAID/Zimbabwe's Democracy and Governance Team 
Leader, Stephanie Funk, and Senior Democracy Advisor, Deprose 
Muchena, attended a budget meeting of the Parliamentary 
Portfolio Committee for Lands and Agriculture.  The Committee 
has oversight responsibility for two Ministries: the Ministry 
of Lands, Agriculture and Rural Resettlement; and the Ministry 
of Water and Rural Resources.  With the support of USAID and 
its implementing partner, the State University of New York 
(SUNY) at Albany, Parliamentary Committees are now 
implementing a re-engineered budget process involving open and 
transparent review of budgetary priorities. As Daniel Ncube 
(ZANU-PF), the chair of the Portfolio Committee stated, "This 
is the first time this Committee is bringing people together 
to discuss the budget.  It makes a profound change in the way 
Parliament operates in that we will now exercise control over 
public expenditure and help the government allocate funds 
where they need it most." By inviting both citizen groups 
(stakeholders) and Ministry officials to this meeting, the 
Portfolio Committee enhanced the public's involvement in 
Parliamentary business and in good governance.  Unlike the 
past, Parliament is no longer rubber stamping executive 
proposals or allowing the budget process to be done in secret. 
There is now a concerted attempt to bring this aspect of 
public policy into the public domain.  These are hopeful signs 
that may portend increased legislative oversight of executive 
branch functions.  However, these positive developments are 
occurring only in Committees and not in the full House of 
Parliament.  More importantly, Parliament retains the power to 
"fast track" legislation by short circuiting the Committee 
process, and thus, nullify the benefits of the new portfolio 
committee review process. 
 
- - - - - - - - - - - - - - - - - - - - - - - - - - 
New Participatory Approach to the Budgetary Process 
- - - - - - - - - - - - - - - - - - - - - - - - - - 
 
2.  (SBU) The structure and proceedings of the Lands and 
Agriculture Committee meeting showed that the budgetary 
process is becoming increasingly participatory.  The Portfolio 
Committee invited key stakeholders to provide comments on the 
2003 budget bids, including the Commercial Farmers Union 
(CFU), the Indigenous Commercial Farmers Union (ICFU), the 
Zimbabwe Farmers Union (ZFU), the University of Zimbabwe (UZ), 
the Center for Applied Social Sciences (CASS), Women and Land 
in Zimbabwe, the Farm Community Trust (FCT), the General 
Agriculture and Plantation Workers Union of Zimbabwe (GAPWUZ), 
the Cotton Growers Association, the Tobacco Association, and 
the Farmers Development Trust (FDT).  Also invited were 
members from the private sector, including Cold Storage 
Company (CSC), CFI Holdings, and Farm and City Center. On the 
Government side, Ministry officials up to the Permanent 
Secretary (PS) level were invited to defend their proposals, 
 
SIPDIS 
explain expenditure patterns from the 2002 budget, justify 
projections for the 2003 budget and discuss the overall macro- 
economic context with Parliament and the public.  All invitees 
participated actively throughout the entire day. 
 
- - - - - - - - - - - - - - 
State of the Civil Service 
- - - - - - - - - - - - - - 
 
3.  (SBU) The meeting was characterized by the openness of the 
ministry officials, the interest displayed by the various 
stakeholders, and the convergence of analysis on issues of 
land reform, the budget and what needed to be done to salvage 
an increasingly desperate situation in Zimbabwe. 
Presentations were heard from the two Ministries, followed by 
questions from Members of Parliament (MPs) and the 
stakeholders.  Particularly striking was the level of 
professionalism and excellence displayed by the civil 
servants, their high level of commitment to their jobs under 
harsh and deteriorating conditions, and their use of this 
Parliamentary platform to advocate for more resources.  The 
Ministries' submissions highlighted a variety of concerns, 
such as the inadequacy of budgetary allocations, ever 
declining capital budgets, increasing recurrent costs, high 
staff turn over, weak human resource development, non-existent 
retention policies, the difficulty created by the withdrawal 
of donor funding in many critical areas, the impact of the 
foreign currency shortage, the difficulty of budgeting in an 
inflationary environment, and the lack of synergy between the 
various line Ministries and the Ministry of Finance which 
allocates the resources.  In private, a number of them 
expressed their frustration with political interference by 
Ministers who have little to offer technically. 
 
4.  (SBU) The ministry officials received sympathetic support 
from all the stakeholders present.  The general consensus was 
that agricultural budget line items should be increased if the 
country is to avoid sliding into a complete disaster.  The 
call for increased funding was strongest for veterinary 
medicines and agricultural inputs in order to buffer the new 
small holder sector.  There was concern, however, that given 
the macro-economic environment, this may not be possible. 
 
- - - - - - - - - - 
Land Reform Program 
- - - - - - - - - - 
 
5.  (SBU) The principal Director for Agriculture Engineering, 
Mr. R.J. Chitsiko stated that land reform is coming to an end, 
ushering in a new era of agrarian reform characterized by 
three phases: 
 
a. Restoration- restoring productive capacity on newly 
acquired farms and in small holder farming areas 
(mechanization, training and technical support); 
b. Consolidation- consolidating infrastructure and growth 
(including tobacco barns, roads, water services, fences, etc); 
and 
c. Expansion- expanding the agro base and output on the 
acquired farms as well as in communal areas. 
 
6.  (SBU) The Director did not clearly spell out how all these 
phases would be accomplished but a look at the ministries' 
budget proposals highlights the challenges that lies ahead. 
While the Government's slogan, "Land is the Economy, the 
Economy is Land" is often repeated, the allocation for 
agricultural inputs to support newly "resettled" farmers was 
grossly inadequate.  The expenditure of resources in the 2002 
budget and the projection for 2003 exposed the mismatch 
between the rhetoric of the political leadership and reality 
of actual expenditures.  In the 2003 bids, the Ministry 
requested Z$15 billion for agriculture inputs but stakeholders 
from the tobacco sector indicated that tobacco needed a 
minimum of Z$31 billion in 2003 for input costs to enable 
farmers to recapture productions levels of the 1990s.  The 
private sector said that they estimated that at least Z$50 
billion was needed for agriculture inputs alone.  The Acting 
Director of the Grain Marketing Board (GMB) indicated that the 
parastatal is currently operating under a serious deficit and 
needed Z$20 billion for food imports against an allocation of 
Z$6 billion. Questions were also raised about why the Ministry 
had spent only 9% of its 2002 first quarter allocation for 
Land, Resettlement and Technical Services, considering the 
verbal importance attached to it by ranking GOZ officials. 
 
7.  (SBU) One MDC MP asked who the beneficiaries were in the 
fast track land reform program and warned of the negative 
impact of allocating farms to untrained and inexperienced 
people who have other jobs.  This prompted calls from other 
participants that a thorough audit of the land reform should 
be conducted especially after the PS from Water and Rural 
Resources admitted that an initial audit had revealed that 
beneficiaries were only living on 5 out of 31 farms.  Other 
issues that were discussed included: the proposal to establish 
a "Land Bank," guaranteed by government; training of new 
farmers; land acquisition costs; and the role of the private 
sector.  The CFU called for compensation for commercial 
farmers who have lost their properties under the reform 
program and are now legally required to pay their workers two 
months salary for every year they worked for the farmer. 
GAPWUZ pointed out that the dislocation of farm workers from 
resettled farms is causing an increase in the number of 
Internally Displaced People (IDPs) as some of them do not have 
rural homes to go back to.  GAPWUZ argued that these people 
need food and shelter and they should be considered for land 
resettlement. 
 
- - - - - - - - - - - - - - - - - - - - - - - - - 
Livestock: The Threat of Foot and Mouth Disease 
- - - - - - - - - - - - - - - - - - - - - - - - - 
 
8.  (SBU) Dr Stewart Heagreaves, the Principal Director of 
Veterinary Services informed the Committee that the agro-based 
nature of the Zimbabwean economy required a significant 
investment in eradicating foot and mouth disease.  He pointed 
out that South Africa would soon be requiring a certificate 
that shows that all agro-based exports were grown in non-foot 
and mouth disease zones.  Morocco already requires such a 
certification for tobacco exports.  He warned that sooner or 
later Zimbabwe will find it difficult to export, thereby 
affecting projected foreign currency inflows and ultimately 
the entire economy.  Zimbabwe had a very small budgetary 
allocation for foot and mouth disease in 2002, to the extent 
that the GOZ relied on assistance from the Botswana Vaccines 
Institute, for the bulk of medical requirements.  The 
Institute has since discontinued supplying vaccines to 
Zimbabwe following the GOZ's failure to pay its debts. While 
the 2003 veterinary budget reflects a 90% increase from 2002, 
there has been no increase in real terms due to an inflation 
rate of over 118%.  The problem of inadequate medicines is 
worsened by other severe operational problems such as 
transport problems, with 78% of its vehicle fleet out of 
service. 
 
- - - - - - - - - - - - - - - - - - 
General Approach of Bi-Partisanship 
- - - - - - - - - - - - - - - - - - 
 
9.  (SBU) The vast majority of MPs conducted themselves in a 
non-partisan manner and the Chair of the Committee, Daniel 
Ncube (ZANU-PF), shared the chairmanship with the ranking 
opposition member, Renson Gasela (MDC). 
However, the testimony of the PS for Water and Rural Resources 
Mr. Pazvakavambwa was the one exception.  In response to the 
private sector's concern on the issue of price controls and 
their causal linkages to shortages in the retail sector, the 
PS declared that the private sector must complement the 
government and recognize that they are in a new partnership 
with government around land reform, and as such they must not 
be profit-driven.  He threatened that, "if the private sector 
continues to be driven by profit, then there will be no 
private sector." The rhetoric of this PS reflects some of the 
anti-private sector sentiments of the GOZ.  The Committee 
Chairman, MP Ncube, deftly maneuvered the potential minefield 
that the PS' remarks created and ensured that the discussions 
remained focused on the budget bids. 
 
10.  (SBU) Issues of incompetence, maladministration and sheer 
corruption also arose during the PS' presentation.  He 
admitted that a recurring problem in the Ministry was that of 
dam construction and other large projects, where payments were 
sometimes made for work that was never carried out.  He said a 
lot of money was paid for "standing time," where contractors 
were not working but still claiming payment either because the 
government had failed to meet its part of the bargain, delayed 
implementation or had foreign currency shortages that affected 
operations. He cited the Tokwe Mokusi and Dande Dams as 
typical examples of such cases where the government paid 
contractors six billion Zimbabwe dollars in 
suspension/standing time.  Dam construction is taking longer 
than planned because of delays, suspensions, overturning of 
tender decisions by politicians and other factors beyond the 
control of Ministry officials.  One official from the Ministry 
pointed out that tender decisions were being manipulated 
towards indigenous contractors who had no knowledge or 
equipment to carry out the task. "When some of these 
indigenous contractors are advanced money to kick start the 
contract, they spend the money on luxuries and other things 
unrelated to the project, causing delays and embarrassment to 
the policy of indigenization." 
 
11.  (SBU) The PS surprised delegates in response to a 
question about equipment that was bought from China.  When 
asked if the equipment had been purchased, he responded, "We 
received tractors, caterpillars, lorries and front-loaders 
from China. Most of these came just before the elections, and 
we were able to use some of the trucks for election 
activities."  The audience audibly gasped at this statement, 
in response to which the PS quickly added that the trucks had 
been used to ferry ballot boxes and not party people. 
 
- - - - - - - - - - - - - - 
Commitment is Wearing Thin 
- - - - - - - - - - - - - - 
 
12.  (SBU) The civil service specialists who made 
presentations at this meeting are the backbone of Zimbabwe's 
public sector.  They possess the knowledge, skills and 
understanding of government policy to manage government 
functions efficiently.  In private discussions with the civil 
servants in the Ministry of Lands, Agriculture, and Rural 
Resettlement, a bleak picture emerged of a demoralized staff 
that is seriously considering leaving government service and, 
perhaps, the country. If their sentiments are shared by their 
colleagues, then the possibility of a massive exodus of 
specialists and experienced people from key Ministry positions 
is a strong possibility.  This exodus would seriously erode 
Zimbabwe's ability to recover from its current crisis.  One 
senior civil servant confided that: "We are doing all we can 
under very difficult circumstances.  We have a competent 
professional work force whose frustration levels have reached 
a boiling point.  My department is a skills-based department, 
but I am losing an average of a person per week to the private 
sector and to the region due to poor salaries and inept 
leadership.  Another senior civil servant pointed out that he 
had been in government service for 33 years and if he were to 
go to the UK and become a junior veterinarian in an abattoir, 
he would equalize his annual salary in six days.  He too 
confessed that he had reached a breaking point and was 
considering quitting. This picture raises serious concerns for 
Zimbabwe's future. 
 
- - - - - - - - - - - - - - - - - - - - - - - - - 
The Role of the Committee in Budget Allocations 
- - - - - - - - - - - - - - - - - - - - - - - - - 
 
13.  (SBU) The Stakeholders asked the Committee how much 
influence it had to change priorities in the budget.  The 
Committee Chairman explained that in the past, Parliament 
would add input to the budget process late in the day or not 
at all.  He said the Committee lacked the capacity to argue 
the case to the Executive but this process was helping to 
strengthen their abilities.  He said they would take what they 
had heard and move to the next level. He explained that the 
next step was for the Budget and Finance Committee to look at 
all the submissions from the Portfolio Committees and then 
start negotiations with the Ministry of Finance. The 
stakeholders emphasized that the Parliamentary process has to 
be implemented on a regular basis and become the norm; they 
stressed that stakeholder consultation should not end with 
this meeting.  They urged the Committee to be involved in the 
actual negotiations with the Ministry of Finance and the whole 
decision making process.  Chairman Ncube wrapped up by stating 
that "We work as one in the Committee, not as party members 
but as Zimbabweans, to try and get our economy going and we 
are at your disposal.  This is the beginning and we will see 
it through to the end." 
 
14.  (SBU) At the end of the meeting, there was a general 
consensus that Parliament should take leadership on fiscal 
policy in general and the budget in particular. 
 
-- - - - - 
Conclusion 
-- - - - - 
 
15.  (SBU) The Lands and Agriculture Portfolio Committee is 
one of the six Committees that USAID-funded SUNY has worked 
with to hold public consultations on the national budget. 
These six Committees are leading the implementation of 
Parliamentary reforms by enhancing public participation in the 
legislature and by exercising increased legislative oversight 
of the executive branch.  Having Parliament host the CFU, ZFU, 
ICFU, GAPWUZ, the private sector and civil servants in 
dialogue serves to enhance its legitimacy and is important to 
stakeholders, who feel that their views are being considered. 
In the long run, the goal is that the Committees gain 
confidence in their new roles and will pressure the House to 
ensure that legislation be subjected to Committee review and 
not fast tracked without proper examination. 
 
16.  (SBU) Through USAID's assistance to Parliament, the 
committee system is being strengthened and committees are 
taking incremental steps towards bridging the divide between 
the MDC and ZANU-PF MPs.  There is more bi-partisan 
collaboration at the committee level than in the full House, 
as this meeting showed.  At the conclusion of the meeting the 
Chairmen of the Portfolio Committee publicly thanked both 
USAID and SUNY for the support given to Parliament and 
underscored the importance of the reform agenda to the 
resolution of the outstanding issues in Zimbabwe that require 
a stronger and more proactive Parliament.  SULLIVAN