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US$800m at risk in 2022 NGOs Bill: Govt cuts its nose to spite its own face

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THE ill-conceived Private Voluntary Organisations Amendment Bill could cost Zimbabwe close to US$800 million in development funding this year – with devastating social and economic consequences – if the government persists with its repressive legislative agenda, a report by local researchers warns.

MOSES MATENGA

The report, titled Punching Holes To A Fragile Economy?, compiled by Prosper Chitambara, Clinton Musonza and Phillan Zamchiya, 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.

Foreign currency is critical in sustaining the forex auction system. Any disruptions in the activities of NGOs through legal and/or non-legal means could result in the country losing out massively, the report says.

The 2019 Labour Force and Child Labour Survey from the Zimbabwe National Statistics Agency says the NGOs sector employs 1.2% of the total employed people, which translates to an aggregate figure of 17 643 formal jobs.

This further translates to thousands of livelihoods that are being sustained through these jobs. To put into context, the 2019 Labour Force and Child Labour Survey says the share of informal employment to total employment is estimated at 75.6% in 2019.

Moreover, according to the African Sun Limited 2020 Integrated Annual Report, conferencing business from NGOs has consistently anchored their city and country hotels segment.

This segment was their cashcow in 2020 as the impact of the Covid-19 on the hotels and tourism sector saw other segments, particularly the resort hotels and leisure division, plummeting in sales.

International room nights declined by 78%, while local room nights decreased by only 28% from 2019 as NGOs, government and quasi-governmental organisations continued to operate albeit under restricted conditions.

“A survey we carried out with a number of NGOs revealed that the contribution by NGOs to tax revenues ranged from US$4 000 to US$35 000 per month depending on the size of the NGO. This is quite significant and has provided the government with requisite resources to finance development.

“In general, coverage of social assistance programmes in Zimbabwe has been low and inadequate, and in fact declined since the start of the Covid-19 pandemic,” the report notes.

“According to the 2022 national budget, Zimbabwe received an estimated US$130 million in humanitarian assistance in 2021. NGOs have also been playing a critical role in terms of the provision of water, sanitation and hygiene  services across the country which could be threatened if the activities of NGOs are disrupted. The 2022 national budget statement says Zimbabwe received an estimated US$13 million towards water and sanitation in 2021.

“Importantly, a lot of development indicators have been on account of the partnership between the government and NGOs. For instance, the country has made some progress in terms of reducing mortality. According to the 2019 Multiple Indicator Cluster Survey, the maternal mortality ratio declined from 651 in 2015 to 525 in 2017 and then 462 in 2019.

“The 2020 Zimbabwe Progress Report on SDGs says progress has been made with regards to HIV infection, with the number of new HIV infections reducing from 3.9 per 1 000 uninfected population in 2015 to 2.8 per 1 000 in 2019. The malaria incidence per 1 000 population has progressively declined from 29 in 2014; to 14 in 2016; 10 in 2017; and only 5 in 2018. TB incidence has climbed down to 210 per 100 000 population in 2018, from 278 per 100 000 population in 2014.”

While some might claim the government is merely targeting NGOs that deal with political and civil rights, international experience from 134 countries shows that official bilateral aid flows dropped by 32% in the years after aid-recipient governments introduced new restrictions on humanitarian and civil society groups largely because donors could no longer fund preferred activities. As many NGOs implement social protection and other anti-poverty interventions, reductions in foreign aid have implied cuts to critical productivity-enhancing services for the poor and vulnerable.

In other studies there is even a greater impact on aid flows, with 45% less foreign aid channelled towards countries that restrict CSOs’ ability to engage in advocacy.

Zimbabwe is unlikely to be an exception and could suffer serious consequences.  

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