Zimbabwe: Government to Audit Reserve Bank Debts

Lloyd Gumbo Herald Reporter

GOVERNMENT will soon establish a special purpose vehicle to audit all Reserve Bank of Zimbabwe activities that resulted in the accrual of huge debts prior to the introduction of the multi-currency system, Parlia-mentarians heard last week.

The SPV will be introduced through an Act of Parliament and will provide for an administrator who will take claims from creditors, while the central bank will provide names of debtors.

Finance Minister Tendai Biti last week told the Parliamentary Portfolio Committee on Budget, Finance and Investment Promotion that the RBZ board had come up with the recommendation.

Central Bank Governor, Dr Gideon Gono chairs the board.

Minister Biti said it was presently not clear how much the central bank owed. Figures ranging between US$1,2 billion and US$1,5 billion have been bandied around.

The committee hailed the initiative saying it was the only way the RBZ debt could be validated.

“We create an SPV, we appoint an administrator at law and that administrator then receives claims by creditors but in receiving those claims, he should satisfy two things that are the legality of that transaction in terms of the Zimbabwean law. There is also the accounting issue — was debt actually incurred, where 40 bags of maize actually delivered? He is almost a liquidator in a liquidation or insolvency issue.

“What then happens is that the administrator will also receive assets from the RBZ including those who owe the bank, that is if they say we are owed by farmers for equipment,” Minister Biti said.

The administrator would also assess the bank’s quasi-fiscal assets.

The Finance Minister said the exercise was not a witchhunt but sought to balance the sovereign interests, accounting interests and the laws of Zimbabwe with the intention of proving liability. Minister Biti said the SPV would help in liberating the bank’s balance sheet which he described as a nightmare.

“It will also allow for the recapitalisation of the bank and it will also even give an opportunity of a debate that so far has been taboo in Zimbabwe — the partial privatisation of the bank.

“The State doesn’t have to own the central bank, the central bank is just a conduit. The South African central bank is not owned wholly by the State but people in Zimbabwe think that there is magic that comes with owning even if you are owning a rat that has kwashiorkor,” Minister Biti said.

He said the bank owed about US$300 million in funds taken from private FCAs while over US$200 million was owed through quasi-fiscal activities.

Minister Biti said Equatorial Guinea was indebted to the tune of US$200 million while regional banks had not been paid about US$100 million.

At least US$82 million in statutory reserve payments was also outstanding.

Minister Biti said Government was in the process of negotiating with creditors for a debt-takeover, saying some of the debts were incurred for Government business.

Committee chairperson, Cde Paddy Zhanda of Goromonzi North (Zanu-PF) said: “We also appreciate particularly the issue of getting the SPV, which isn’t only going to absorb the debt, but is also going to find how the debt was accrued.”

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Zimbabwe: Government to Audit Reserve Bank Debts