Professor Welshman Ncube 3rd JOMIC co-chairman trapped in power dynamics? HOT SEAT (PART 2): Journalist Violet Gonda brings you part 2 of an interview with Professor Welshman Ncube, the Minister of Industry and Commerce and co-chair of JOMIC. He talks about the problems he has inherited in his new ministry and what measures he is taking to try to make it viable. How is he dealing with the ongoing chaos at Beitbridge border post and the corruption around the duty charged on imported items? And how is he dealing with corruption at parastatals, like ZISCO Steel?
Broadcast 17 April 2009
VIOLET GONDA: We bring you part two of the interview with Professor Welshman Ncube, the MDC Minister of Industry and Commerce and one of the chairpersons of the Joint Monitoring and Implementation Committee. In part one he spoke on the inner workings of JOMIC and in part two I first asked him to tell us what sort of challenges he is facing in his new ministry.
WELSHMAN NCUBE: Well of course there are general challenges we face which all the ministries will face which the whole government faces. Where your revenue base is so narrow, that you do not have enough resources to pay meaningful salaries, you have everybody from the President to the general hand being given an allowance of a US$100 every month - that is unsustainable.
You have very little money once you have paid those allowances to in fact then run the rest of the activities of government, get fuel for cars, get cars serviced, to buy stationary, to subscribe to the internet – all the basic things which anywhere else would be regarded as normal. We struggle around these and my ministry, just like all the other ministries faces these challenges.
Then in respect of our mandate and under the State programme it is our responsibility as the ministry to ensure that we assist, in particular the manufacturing sector to be able to raise capacity utilisation from an average of about 10% at the moment to an average of around 60 to 70% by the end of the year. You know that over the last years because of a variety of bad policy choices were made – price controls, surrender requirements - a whole plethora of problems – industry was unable to recapitalise; industry was unable to do ordinary ongoing routine maintenance of equipment; industry was unable to source raw materials; industry was often forced to sell commodities they produced at well below cost. And the industry - where those who were exporters and earned foreign currency, put it in their foreign currency account, this money was sterilised by the Reserve Bank and is not there at the moment. So now you then have the complete collapse of the Zimbabwean dollar, the introduction of the multiple currency system which means that everything that people have accumulated over the years, you suddenly are at zero debt. Whether you are a hundred year old company or a two day old company you change currency you immediately are at zero debt -beyond the equipment, the machinery and the capital items you own. In terms of a cash flow you are all suddenly at zero, which basically then means you have literally no money for working capital, let alone money for refurbishment and for retooling. And this is the challenge.
In addition to all of that in the ordinary production work cycle - you have the manufacturer who manufactures, invoices the retailer and pay in 30 days – the retailer takes the goods, puts them up in their retail shop and after the 30 days they pay. In the meantime also the banking sector would have advanced credit to the manufacturer and sometimes the retailer - ‘here is credit and pay us within 30 days to 90 days’. You have money, you buy your raw materials, you produce, you sell, and by the time you sell you now can pay back your bank.
The financial institutions are not operating in the usual way, they have no money because also of the changes of currency. It means credit is not available to the production sector. And to add to that the production sector is operating at such low capacity it is unable to employ significant numbers of people and those it employs pay very low wages. It means therefore the buying power of the people in Zimbabwe is also extremely low. So that even those who are able to import goods into the retail sector find themselves unable to move those goods because the consumer is buying only the basic necessities; and without credit - the furniture shops, the clothing shops cannot run. So you have this cycle of production which has been severely disrupted and this is what we are trying to fix and these are the challenges that industry is facing:
Absence of lines of credit, no money to recapitalise, no money for working capital and this is why you have seen us going to SADC, going to South Africa trying to negotiate lines of credit so that we can revive the production sector.
GONDA: That is what I was going to ask – what measures are you going to put to ensure that industry becomes viable now and what possible options of accessing capital are you exploring yourself?
NCUBE: Violet the key is being able to first do two things: To get the internal financial system working so that it can lend the money to the productive sector; two - organise external money to come into our productive sector in the form of lines of credit. Organise external investors with money to come in and invest into the productive sector in Zimbabwe. So that’s the challenge and that is what we need to do, that is what we are doing.
I’m aware that the Minister of Finance is working round the clock in trying to fix the financial sector. I know that collectively, government has been working to ensure that we negotiate with the external financial sectors with donors, lines of credit for our companies. This is what we were doing at the SADC summit in Swaziland, we are talking to COMESA, the PTA bank, and we are talking to the Africa Development Bank.
We are talking to other banks and financial institutions across the world – in India, in China and Russia – those who have not imposed any sanctions on Zimbabwe, who can immediately move to extending resources, financial resources and credit lines. And in this instance, we do not want grants. We are not saying give us money, we are saying let’s do business. Lend money to us in the normal commercial way, give us an opportunity to produce and we will pay you back.
So these are the things we are doing so we have been to India, the Minister for Regional Integration, International Cooperation has been to India to negotiate this; we have been to the SADC countries we are negotiating this. We are in communication with and at the moment prioritising the countries which don’t have sanctions - and the banks and institutions that have not imposed sanctions on Zimbabwe. So that’s our first priority of what we are trying to do.
GONDA: And the second priority?
NCUBE: Well then the second priority is to engage the rest of the international community. We all know that the deep pockets with real money, you’ll find it in Europe, in the United States, in Canada or in what is normally referred to as the white Commonwealth. That’s where the deep pockets are. But there are issues, there are governance issues, some of the issues we talked about earlier in this programme, the outstanding GPA issues, farm invasions and so forth and so on which are affecting our ability to move with speed to restore relations and to restore normalcy with that part of international community.
But we have agreed that we will reengage with them, we will commit ourselves to doing certain things around the issues which they are concerned about. So we will be talking to them but we realise that it will take time. Which is why also SADC agreed that as SADC they were setting up a committee to engage these countries and to try and persuade them - which is why SADC in its communiqué from Swaziland instructed that all the embassies of SADC countries all over the world, wherever there are sanctions against Zimbabwe, they should work round the clock to lobby for the lifting of these sanctions and in those countries where there are no sanctions they should work to help Zimbabwe access financial assistance in terms of budgetary support as well as in terms of lines of credit.
GONDA: So do you think the sanctions should be removed even though the conditions that originally necessitated the placing of the sanctions have not changed?
NCUBE: Absolutely. As an inclusive government we are unequivocal and we agreed to it in the Global Agreement that the sanctions will be lifted as soon as an inclusive government is in place. It is in place and in our view yes, there are issues, there are issues on human rights, there are issues on governance but you will not help the inclusive government address those issues, work together with speed to correct those anomalies, to have a greater respect for human rights, get greater respect for the rule of law, to be effective in stopping farm invasions, a government which has no resources to actually get the police to move around. A government with no resources to monitor the Ministry of Lands, to monitor what is happening, is unable at the end of the day to deliver on the promises of the GPA. Which is why we are saying yes these things are there but let us work together - with the international community assisting us to address them. Without that assistance it will be that much more difficult to address those issues.
GONDA: But then you see, others will say if the authorities in the inclusive government, namely Zanu-PF, if they were really serious and really wanted help shouldn’t they at least abide by the provisions of the Global Political Agreement and actually restore the rule of law? If they desperately want the money, if they know that this is… (interrupted)
NCUBE: How do you restore the rule of law when you need the police to restore the rule of law and they’ve no capacity to go to the farms to see what is happening? How do you restore the rule of law if the Minister of Lands is unable to get to the farms to determine what is happening? Which is why we are saying, if you have a bankrupt government how does it do anything, how does it do anything? Because it’s not just that you have people who breach the rule of law, the farm invasions are sponsored by the State – it’s not necessarily true. It is that the people at the community level sometimes also resort to self-help. When they do resort to self-help the State must be sufficiently strong to intervene but if you have a weak State which is bankrupt which is unable to intervene, then you cannot correct those anomalies.
GONDA: How would answer people who say that there are still three people who are still held on ridiculous charges, instituted by a corrupt and inept Justice Ministry, there are still seven people missing and there are farmers being hounded so why should anyone invest or give money to Zimbabwe when Zanu-PF are harassing or stopping production of agricultural products. How would you respond to that?
NCUBE: Well on the first part, let’s deal with the technical part. There are no charges instituted by a corrupt Justice ministry. The charges are first instituted by the police and then the Attorney General - who is not Justice Ministry, takes them up through his prosecutors. That’s one. On the question of whether or not these people should be prosecuted, the point Violet is that if you are true believers in the rule of law, if you are true believers and you are not hypocrites, you must accept that the rule of law must take its course, regardless of who the accused person is. And you cannot have people tried, convicted, tried, and acquitted in the court of public opinion. It does not work like that. And if we want to get this thing right we cannot start by doing public trials in the court of public opinion. So let’s subject everyone to the rule of law if the police authorities say they have evidence let us check the accused persons humanely, let us expeditiously bring them to court, let the court of law determine the question.
Then secondly, on the farm invasions I absolutely agree with you that if there are farm invasions then they must stop. But I do not think, I do not think that it is right for those who it is within their power to assist us to ask us to do things which if we have no assistance we cannot do. It is pretty much like a sponsor in a soccer match saying I want you to go and play; I want you to be in the top of your log before I sponsor you. So you have a team without a uniform, without soccer boots, who have no capacity to train and say they must first win the soccer league before you can sponsor them. It just does not make sense.
GONDA: But surely is it too much to ask, to say ‘please restore the rule of law, stop the violence’, is that too much to ask from the international communities point of view?
NCUBE: It is not too much to ask, it is not too much to ask but it is not a matter, if we have had the rule of law being violated, if we have a culture of violence which is not necessarily always orchestrated by the State but can be orchestrated at the community level by people who are used to a particular way of doing things and you are asking us as the new political leadership to intervene to bring it to an end when we are clearly without the resources to do so. It is not a self-executing thing to enforce the rule of law. You need resources to enforce the rule of law. So which is why I am saying you cannot deny us the ability, the capacity to do it and then say we must still do.
GONDA: You know, we can go round and round on this one, so going back to your ministry, what about the chaos at Beitbridge border post and the duty which is holding up investment and preventing people importing equipment which is not available in Zimbabwe, is this not affecting your ministry?
NCUBE: Well there are problems at Beitbridge border post, we are painfully aware of them. When we have been talking to the South Africans to say come and invest in Zimbabwe, we have been talking to Zimbabwe businessmen who are in South Africa, they have raised the issues about the delays at Beitbridge border post, sometimes there are commercial trucks waiting there to be cleared for two weeks.
And we have decided as the government that we will try to work on an urgent basis with our colleagues in South Africa to convert Beitbridge border post into what we are calling a one-stop border post. So if you are cleared on the Zimbabwean side that’s it, you shall be cleared throughout and if you are cleared on the South African side, that’s it, you are cleared. And we are trying to work on this. There are issues about the compatibility of the two systems but it is something we have prioritised, it is something we are raising within the South Africa/Zimbabwe joint commission.
And there are issues of the bridge itself, there are issues of capacity there and indeed even as we talked with stakeholders in Victoria Falls, the Minister for Tourism was raising some of these issues; ‘as a country do we really want to say the first person who interfaces with tourists and our are visitors is the revenue authority? Are they the best people to be necessarily in charge at the border post and so forth’, so all these things are work in progress that we need to address as a matter of urgency.
GONDA: And of course many people have been asking how you are going to stop the horrendous bribes going on at Beitbridge. What can you say about that?
NCUBE: Well we are told that a lot of bribery is rife there but as a new inclusive government we have zero tolerance for that and we have no doubt that we will be moving with speed to investigate what is happening there and to bring it to, if indeed there is bribery and corruption, to bring it to a swift end.
GONDA: And you know ZISCO Steel has been resuscitated over and over again but there have been reports about layers and layers of corruption and even Minister Obert Mpofu said this in parliament a few years ago. So what are you going to do about ZISCO Steel in particular and the issue of corruption?
NCUBE: Well we are five weeks or six weeks in the job. There are problems at ZISCO, we know that. In fact ZISCO hasn’t produced steel since January 2008 so for all practical purposes it is a white elephant. They are surviving on selling scrap steel accumulated over years. We are also aware that part of the problem with the previous management was externalisation of money through the subsidiaries they have in Zambia and they have in Botswana, we are aware of that.
And we have said we need to commercialise ZISCO. We have put in place a new management there, or at least a new managing director and a new board put late last year - with a mandate to ensure that the new managing director there is able to deal with issues of the other senior managers working with the board at ZISCO. So that we have a team which can deliver on what we want and indeed if they are unable to deliver we will intervene and make sure we put in place a team which delivers and make no mistake about that.
But the most important thing at ZISCO is to be able to introduce equity and to be able to introduce new money. To be able therefore to recapitalise it, to refurbish blast furnace number four, revive blast furnace number three and go back to full production. And there are lots of things which are required here: You need to acquire and have locomotives, you need coaches to ferry the iron ore, the limestone, you then also need to fix the question of the supply of coal from Hwange. At the moment you get two hundred tons delivered in a month when you actually need more than 20 000tons in a month. Which basically means you can’t fire up your batteries; you can’t start any operation at ZISCO.
And so we need to fix the enablers - water, coal and electricity, so that when we have fixed the internal issues we can be able to be up and running at ZISCO. But the most critical, the most urgent thing is to be able to introduce equity there and we are in the process of processing applications for investors to come into ZISCO and hopefully we will move with speed and hopefully we will have the luck and the wisdom to find the best investors there to partner us in getting ZISCO on its feet again.
GONDA: What about parliament? When is the parliament going to get down to business and actually change some laws like the Gold Act, like AIPPA or even when are the portfolio committees going to be constituted?
NCUBE: Well it’s not in the first instance a function of parliament to get this legislation in place. The Executive must first of all get the legislation in place. The policy changes have been agreed through STERP, the line ministries must now review the relevant legislation as soon as possible. There is that instruction to make sure that all the legislation, part of why we were in Vic Falls was to be able to draw up those 100 day plans, which should include the processing of the requisite legislation to implement the agreed policies. And once the Executive has processed and the bills are ready they will be taken to parliament and they will be debated by parliament and hopefully those portfolio committees will be in place, they’ll look at the legislation, parliament in its fullest sense will also look at it and we can get it over with sooner rather than later.
GONDA: Do you still think it was a good idea challenging Lovemore Moyo’s appointment as Speaker of parliament - as the Mutambara MDC?
NCUBE: The applicant in the case is Professor Jonathan Moyo, that’s my understanding. Some of our members of parliament provided supporting evidence of what they witnessed during the voting in terms of what was complained of. That is what I am aware of and my understanding, I’ve not read the court papers and so I cannot vouch for this, but my understanding related to the manner in which the voting was conducted in a manner which contradicted the rules and procedures of parliament.
Whether or not it is right to strictly enforce the rules of parliament at a particular historical moment or not is another question, but as a general proposition, when we are insisting on the rule of law - we spend much of today talking about the rule of law, that rule of law in my view must apply everywhere, inside parliament, inside the courts, outside parliament, outside the courts and we cannot cherry pick. Therefore if there are individuals who think that the rule of law has not been observed in parliament, surely we must agree that there is a right to test their claim whether or not it has been observed.
GONDA: And finally, I know you are not the relevant minister for constitutional issues but you are a key member of the National Constitutional Assembly and the GPA says there will be a new constitutional process using the Kariba Document as the basis. Now how do you reconcile this position and the calls for a people-driven constitution by the civil society in Zimbabwe?
NCUBE: I always say Violet in respect of the constitutional process we should not allow the ideal (inaudible), to be an enemy of the good and the possible. The fundamentalist position of some people is that; unless you do something exactly my way, unless you do something exactly my way, it can’t be done! We will then never have a new constitution as a country. What is in the Global Political Agreement is an attempt to find a compromise between two opposed views of the world. Our colleagues in Zanu-PF held the view that the processes and procedures of making a constitution must be the preserve of those whom people have elected in an election. In other words parliament as constituted at any one time. That is one world view which they have. The old opposition in the MDC and civil society collectively held the view that let us go through a transparent open process, which is not based in parliament, which is based outside parliament. You needed to reconcile this view.
You could not do it the Zanu way or the Zanu-PF way to the (inaudible) in parliament. Zanu-PF on the other hand will not accept a situation where you exclude totally the elected representatives and say those who have constituted themselves as the civil society have greater right to represent people.
So what we then did in the Global Political Agreement was to seek to reconcile this position, and therefore we brought an amalgam and said let parliament run with the process but let that process be mitigated by open transparent public consultation procedures. Have an all-stakeholders conference at the beginning where you bring stakeholders, you bring civil society into your thematic committee. You then go to the public and consult the public. You take the Kariba document, not as a Bible but as a starting point and say the three political parties sat and thought this was a fair compromise. Where do you disagree with it, what are the changes you want to be made to the Kariba document? And the public comments on it. It is a guide, it is a starting point where you carry that Kariba Document and you put it to the people. Part One says do you have problems with it? No, this can pass. Part Two no, no, no it is wrong, what should happening is this and this. That is what is in the Agreement.
GONDA: Well the NCA is rejecting this…
NCUBE: Well we cannot hold the nation to be hostages of egos of individuals who say unless something is done absolutely and totally in accordance with my way - and let us not forget when we say the people - you are including the people in civil society, you are including the people in the two MDC formations and you are including the people in Zanu-PF. And by definition if you are therefore saying the people in Zanu-PF are no longer a people, their world view doesn’t matter. It means from the beginning therefore your process is not a people driven process – you have excluded some people who disagree with you.
ENDS.
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