PVO Bill’s effect on NGOs will compound economic hardships: ZDI
Nkosikhona Dibiti
The Private Voluntary Organisations (PVO) Bill will precipitate a sharp shrinkage in the contribution of non-governmental organisations (NGOs) to the national economy which will in turn intensify economic hardships in Zimbabwe, a report has revealed.
Zimbabwe Democracy Institute (ZDI) conducted a study titled Civic Space Contestations Ahead of 2023 which examined official datasets to ascertain whether NGOs give any meaningful value to the economy.
“The findings show that NGOs form a key source of foreign currency earnings, employment and tax revenue. The promulgation of the PVO Amendment Bill into law will cause a deterioration in the contributions of the NGOs to the national economy which will in turn intensify economic challenges bedevilling Zimbabwe,” says the report.
According to the Reserve Bank of Zimbabwe (RBZ) Monetary Policy Statement, 202273, the total foreign currency receipts (US$ million) that came from NGOs increased by 50.5% from US$647.78 million in 2020 to US$975.16 million in 2021.
The period between January and September 2022 saw the country receiving development assistance which amounted to US$647.8 million (Ministry of Finance and Economic Development – 2022 National Budget Statement). Of this development assistance, US$401.9 million was received from bilateral partners whilst US$245.9 million came from multilateral partners
“The PVO Bill, if passed, will result in losses in foreign currency as the NGO sector is the third biggest foreign currency earner in Zimbabwe contributing more than foreign investment,” said ZDI.
According to the Labour Force and Child Labour Survey 2019 from the Zimbabwe National Statistics Agency (ZIMSTAT), the NGO sector employed 1.2% of the total employed. This translated to an aggregate figure of 17,643 formal jobs (Zimbabwe Human Rights NGO Forum et al, 2022). This is a very significant portion of the population that contributes directly to the tax revenue and availability of foreign currency in the market. It is against this background that ZDI contends that the closure of civic space by the PVO Bill will increase the number of unemployed citizens in Zimbabwe.
“The operation of NGOs is critical for generating revenue for the government through taxes. The PVO Bill threatens to rob the country of this critical tax revenue stream when implemented,” says ZDI.
The report also alludes to the African Sun Limited Integrated Annual Report (2020) which highlighted that conferencing business by NGOs has anchored their city and country hotels segment.
“This segment was their cash cow in the year 2020 as the impact of the COVID-19 pandemic on the Hotels and Tourism sector saw other segments, particularly the Resort Hotels and Leisure Division, plummeting in sales,” reads the report.
The government of Zimbabwe is in the process of amending the Private Voluntary Organisations Bill that govern public benefit bodies or associations of persons or institutions that carry humanitarian and charity work.
The key proposed amendments are; a) the Bill widens the definition of a PVO – Clause 2. If passed, a PVO will include any ‘legal person’ or any ‘legal arrangement’ whose objectives are to carry out humanitarian and charity work, provide for legal aid, or promote the welfare of animals. Examples of legal persons are clubs, charities, partnerships, associations, business corporations, trusts, clubs, charities, and sole traders, etc.
b). The Bill alters entities that are not PVOs -Clause 2 c). The Bill removes the exemption provided to trusts allowing them to register as PVOs if they were registered with the High Court of Zimbabwe.
d). The Minister may declare any legal person, legal arrangement, body, association of persons or institution as high risk or vulnerable to being misused by terrorist organizations – Clause 2
