Discredited PVO Bill spooks donors
THE Private Voluntary Organisations (PVO) Bill has had an immediate and dramatic effect on government projections, with Finance minister Mthuli Ncube estimating that grants will decrease from US$776 million this year to US$352.8 million next year, a variance of US$423.2 million, although these are conservative figures.
Researchers believe Zimbabwe will lose a lot more than what was projected by Ncube in his 2023 National Budget statement presented on Thursday.
Between January and September this year, Zimbabwe received US$683.3 million, which is way more than what the country is projected to receive the whole of next year.
“Development partners play an important role in the implementation of national programmes and projects through financial and technical assistance support. During the first nine months of 2022, the country received official development assistance amounting to US$638.3 million, of which US$402 million was from bilateral partners and US$236.3 million from multilateral partners,” said Ncube.
“The support was channeled towards funding programmes and projects in various sectors of the economy which include health, agriculture, education, humanitarian and governance sectors. An additional US$124.2 million is expected to be disbursed during the fourth quarter, bringing the total support for the year to US$776 million. In 2023, such support is projected at US$352.8 million mainly targeting social sectors and governance programmes.”
The decline in development funding is likely to have devastating social and economic consequences for the country next year amid indications the government is persisting with the repressive legislative agenda, aimed at stifling civil society ahead of elections next year.
The health sector was the biggest beneficiary in grant disbursements done between January and September after receiving US$408.3 million followed by agriculture at US$100.1 million and governance at US$42.6 million.
A report titled Punching Holes To A Fragile Economy?, compiled by Prosper Chitambara, Clinton Musonza and Phillan Zamchiya, which was released in March, says the proposed law will have a far-reaching negative impact and implications not just for civil society organisations, but also for government development programmes and the poor who rely on aid for survival and access to critical social services.
“NGOs have also played a critical role in bridging the huge financing gap in the critical sectors of the economy such as social protection, education, health, water and sanitation among others,” the report says.
“For instance, according to the 2022 national budget statement, during the period January to September 2021, the country received development assistance amounting to US$647.8 million, of which US$401.9 million was from bilateral partners and US$245.9 million from multilateral partners.
“A further US$202.4 million in development assistance is projected during the fourth quarter of 2021, giving cumulative receipts of US$850.2 million for the year. “In 2022, support from the development partners is projected at US$761.5 million, broken down as US$274.3 million and US$487.2 million from multilateral and bilateral partners, respectively. Importantly, a lot of the gains that have been registered in key health and social indicators have been on account of the partnership between the government and NGOs.”
The PVO Amendment Bill was gazetted in November 2021 and seeks to amend the PVO Act to impose new restrictions, but civil society organisations have warned the proposed amendments will constrain their work and violate human rights, while negatively affecting communities who depend on their activities.
They also said the measures will hit the already struggling economy which relies on development partners to bridge yawning funding gaps due to the country’s inadequate budget and resources. The report says NGOs are playing an increasingly important role as agents of development.
The growth and expansion of NGOs across the globe is testament to their increasingly important role in the development process. It notes effective partnerships between governments and NGOs are recognised as being crucial in accelerating sustainable development.
The role of NGOs is even more important in low-income countries where the fiscal space is limited. Humanitarian organisations offer a broad range of services that include: health, education, social protection, humanitarian assistance, livelihood interventions, emergency response, conflict resolution, democracy building, environmental management, and policy analysis and advocacy.
NGOs across the world help to amplify the voice as well enable inclusion of marginalised groups, including women, persons with disabilities and minority ethnic groups so that no one is left behind.
Creating an enabling environment for NGOs to operate is recognised as being critical for the attainment of the Agenda 2030 on Sustainable Development Goals (SDGs) and the African Union Agenda 2063: The Africa We Want.
“In Zimbabwe, NGOs have been important drivers of sustainable development through a number of channels which include: employment creation, contribution to tax revenues, foreign currency receipts, provision of social protection and humanitarian assistance, growth in the local tourism sector and overall economic growth and development,” it says.
“Owing to the huge financing gap in productivity-enhancing and poverty-reducing sectors of the economy such as health, education, social protection, water and sanitation, the country has had to rely on donor financing from international NGOs and development partners. Sustained and strong partnerships with NGOs and other not-for-profit organisations such as trade unions will strengthen the implementation of the National Development Strategy 1 as well as the attainment of the country’s Vision 2030: Towards a Prosperous & Empowered Upper Middle-Income Society by 2030.”
However, the government gazetted the Bill which it says seeks to comply with recommendations made by the Financial Action Task Force; streamline administrative procedures and allow for the efficient regulation and administration of PVOs; and to prevent PVOs from undertaking political lobbying.
The Bill also prohibits trusts that are registered with the High Court, but are not registered PVOs, from collecting contributions from the public or from outside Zimbabwe for any of the purposes specified in the definition of “private voluntary organisation”, that is charitable purposes, social welfare assistance, legal aid and animal welfare. The 2022 monetary policy statement says NGOs are the third-biggest earners of foreign currency in the country after export proceeds and diaspora remittances.
Total foreign currency receipts from NGOs rose by 50.5% from US$647.78 million in 2020 to US$975.16 million in 2021.