Source: ZRP roadblocks rake in US$60 million | The Financial Gazette June 15, 2017
THE Zimbabwe Republic Police (ZRP) expects to collect nearly US$60 million from traffic fines this year, nearly double last year’s projection, according to Parliament’s budget oversight office.
The police’s pervasive presence on the country’s roads has drawn complaints from frustrated motorists, commuters and tourists, triggering debate within Cabinet and Parliament.
The ZRP has never revealed how much it collects from traffic fines and, three years ago, angrily reacted to projections by former Zimbabwe Revenue Authority (Zimra) chief, Gershem Pasi, that they were collecting between US$3 million and US$7 million monthly.
Pasi also proposed that the money should be deposited into the Consolidated Revenue Fund (CRF).
Now, a report by the Parliament Budget Office (PBO) has blown the lid off revenue collection from government departments, including the ZRP and the Registrar General’s office, in fines and user fees. The PBO, which began operating in September 2016, provides technical advice to Parliament in matters relating to the budget, economic policy and money bills.
The budget oversight organ’s report shows that the ZRP is working with a US$59 million revenue collection target this year, while the Registrar General’s department expects to collect US$27 million.
National police spokesperson Charity Charamba said she was not aware of the report.
“I am not aware of that report or such projections and cannot comment about that,” she told the Financial Gazette.
Probed on how much the police raised last year and revenue forecasts for 2017, Charamba said: “I am a PR person, you get such figures from another department. For those projections why not ask those who compiled the report?” she said.
The PBO’s figures are in line with government expenditure estimates, which also reveal that Treasury, which allows the ZRP to retain money collected from fines to fund its operations, has budgeted for a 90 percent increase in traffic fines this year from the 2016 figure, possibly explaining the police’s aggressive revenue collection methods. Treasury’s 2017 estimates of expenditure reveal that the ZRP expects to collect US$59,1 million in 2017, up from the US$31,47 million fines haul it expected the force to register in 2016. Of the US$59,1 million, the ZRP is expected to spend US$32,17 million on goods and services, US$18,1 million on maintenance and US$8,1 million on the acquisition of capital assets.
The government even expects US$678 000 of ZRP salaries to come from the fines fund this year. ZRP salaries will account for US$323 million of the total Ministry of Home Affairs 2017 budget allocation of US$364 million.
In the 2016 financial year, the ZRP used US$12,5 million from fines revenue to purchase “vehicles, plant and mobile equipment”, Treasury documents show.
The retention of funds by government departments started during the hyperinflationary era, which peaked in 2008, as delays in disbursements from the CRF often resulted in loss of value. As a result, Treasury allowed the departments to retain revenue to fund their operations.
However, the Constitution requires that all revenue collected by government departments should be deposited into the CRF, although it allows exceptions to be made in terms of an Act of Parliament.
Using this loophole, government has allowed several departments, including the police and the registrar-general, to continue holding on to revenue they collect, in terms of Treasury approvals under the Public Finance Management Act.
There have been widespread reports of abuse of these funds, with the auditor general routinely pointing out deficiencies in how they are accounted for. Although all the statutory funds were ordered to open accounts at the central bank from January 2016 to enhance transparency and accountability, the PBO insists this has not stopped abuse.
“It is reported that the combined revenues collected by government institutions or departments outside the budget could have well reached over US$1 billion in 2016, had they been properly and accurately accounted for. This comes at a time when Zimbabwe’s budget has remained static at US$4 billion annually as fiscal revenues continue to dwindle,” the budget office said.
It added that this situation limited the budget’s ability to stimulate the economy and called for all revenues to be deposited into the government’s central fund.
“The increase in cases of abuse of public funds justify calls for Treasury to be the only department entrusted with the responsibility to manage public resources. It has also been noted that a lot of money is spent on non-essential goods and services at the expense of critical issues,” it said.
“This is the highest level of disservice to the citizens and taxpayers when privileged departments splash on luxuries like cars whilst critical service provision like health delivery are underfunded to the extent of failing to provide basic painkillers. It defeats the whole purpose and is illogical for the same institutions with retention funds to then look up to Treasury for financial support, especially for salaries.”
Some funds, such as the New Vehicle Security Registration Number Plate Revolving Fund under the Ministry of Transport and Infrastructure Development, appear to overcharge for services. While PBO data shows the fund expects to generate US$12 million from number plate sales, the budgeted cost of production is just over US$6,25 million.
Zimbabwean motorists pay US$160 for vehicle registration plates, significantly higher than their peers in South African, Namibia, Botswana, Zambia, Kenya and Uganda who pay between US$12 and US$40.
A 2015 auditor general’s report revealed that the number plates fund had been used to pay off up to US$30 million in debts owed by Air Zimbabwe to various creditors, without Treasury approval.
Government departments’ forceful quest for revenue has not only made it expensive to do business in Zimbabwe, but has also affected key sectors of the economy, such as tourism.
Tourism industry players, including Minister Walter Mzembi, have charged that the overly conspicuous presence of police on the roads is affecting the sector.
A visitor exit survey commissioned by government between June 2015 and June 2016 revealed that 43,2 percent of polled tourists said they would not visit Zimbabwe again, citing harassment by police as the reason for their decision.