What a breath of fresh air! The budget statement announced by Finance minister Patrick Chinamasa on Thursday, entitled Towards A New Economic Order, was a relief and a sincere attempt, signalling the commitment by government to ensure real change in the economy.
By Gloria Ndoro-Mkombachoto
There were many and enlightening snippets, for example, the renewal of the public service by retiring old folk and introducing voluntary retirement schemes, agricultural reforms, cutting of government expenditure through reduction in embassies, classes of travel for government officials, etcetera, but what took the cup for me was the streamlining of parastatals.
The budget statement was emphatic in outlining in paragraph 172 that “Fiscal balance under the ‘new economic order,’ however, necessitates that public enterprises, including local authorities, cease to exist just to pay salaries and wages, and incur financial deficits.” It would appear that most parastatals were set up to create employment for all and sundry at the expense of serving the needs of business and society at large. The devil is in the detail as shown below by the anecdote of what grain importers face in applying for an importation permit.
Statistics supplied by Zimstat indicate that Zimbabwe was still a net importer of grain, with maize imports leading with $91 million. During the first half of 2017, Zimbabwe imported grain worth $201,4 million, a clear indication that we are still a net importer of agricultural products. This is necessitated by shortages in the market of grain items such as soya beans, maize, wheat, groundnuts and so forth. There is cropping by local farmers of these grains but demand outstrips local supply by far. In some cases, the price for local grains has been distorted by unscrupulous traders using the method of payment (cash bonds, cash US$, transfer etc,) as an excuse to use differential pricing.
An anecdote of grain importers and bureaucratic machinery of parastatals under ministry of Agriculture So, if you are a large-scale food processor, stock feed manufacturer and so on, chances are sometime during the year you will find yourself supplementing your inputs by importations. The process of securing an import licence is arduous, time-consuming and costly.
The nightmare begins at the first point of call at Ngungunyana Building #1 Borrowdale Road where an potential importer (PI) is given a long list of the various certificates and permits they require before they qualify to apply for an import permit with the ministry.
A PI needs a biosafety import permit which can only be secured at 21 princess drive, Newlands at the National Biotechnology Authority (NBA). The process of securing one is not simple. First, the PI needs a certificate of registration. This means that you first must be registered as a member of NBA. In order to be registered as a member you pay $500 for annual fees and this is renewable every year to be paid in full and is not on a pro-rata basis, depending on when you registered.
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Thereafter, you submit the application to get a biosafety import permit where they make you pay another $30 for the application. For an urgent permit, you are made to pay an extra $20.
The NBA is under the Agriculture ministry with a fully-fledged CEO with all the attendant perks, staff complement and accompanying infrastructure.
The next station for the PI is the Agricultural Marketing Authority (AMA) based at 2nd street extension, Mt Pleasant where one needs to secure an AMA certificate as a commercial grain and oilseed miller/stockfeed manufacturer. At AMA they charge $1 000 annual fees for the certificate. This certificate is valid from January to December every year. So if you choose not to import, you still need to pay this amount. If you had not anticipated any importations during the year and suddenly you need to import for whatever reason, you are required to pay the full annual fee of $1 000 plus an additional penalty of $1 000. Like NBA, AMA is under the ministry of Agriculture with a fully-fledged CEO with all the attendant perks, staff complement and accompanying infrastructure.
The third station is at the Plant Quarantine at Henderson Station in Mazowe where the PI must secure a plant import permit for $30.
Like NBA and AMA, Henderson Station has its own bureaucracy with associated costly infrastructure.
The fourth stop is the securing of a veterinary permit from the department of Livestock and Veterinary Services by Bevan Building, 18 Borrowdale Road for $20.
The fifth action is the securing of an original GMO free certificate from the supplier and it must be couriered, not scanned and emailed.
Armed with your current tax clearance certificate from Zimra and copies of your companies’ certificate of incorporation and memorandum of association attached, you only then become eligible to submit a letter of application for an import permit to the permanent secretary of the ministry of Agriculture.
Once issued, you are presented with a bulk permit of say 3 000 metric tonnes which never comes in as one complete importation. If your grain is not coming in one shipment, you have to split that import permit by going back to Mazowe, where they will issue split permits and for every permit they will charge you $30. This means if your shipment comes in 100 shipments, you end up paying $3 000 extra for the total shipments.
This is a no-brainer. The question that begs an answer is, why are not all these organisations that fall under the ministry of Agriculture anyway, be transformed to be divisions/departments headed by divisional heads, not costly CEOs? Most of the functions these organisations are designated to do are clerical functions and should be carried out by clerks within the ministry. Why are we wasting scarce government resources like this?
These are some of the questions business needs to address as part of the broader parastatals reform in the new order. A mere tip of the iceberg, while this anecdote is related to the Agriculture ministry, this is most likely an occurrence within many ministries across government. For business, this is a high cost to pay for transacting in Zimbabwe. Government is there to support and create an enabling environment for business, not thwart it.
Gloria Ndoro-Mkombachoto is an entrepreneur and a regional enterprise development consultant. Her experience spans a period of over 25 years. She can be contacted at [email protected]
