Cabinet to approve RBZ Bill

Official sources told The Zimbabwean on Sunday that RBZ governor Gideon Gono was summoned to Cabinet last Wednesday, where Finance minister Tendai Biti tabled the final draft of the proposed amendment bill before the Cabinet committee on legislation which gave the thumbs up to the draft law.

Responding last Friday to questions from The Zimbabwean on Sunday on progress on the new law Biti said: It has Cabinet approval and will be finalised on Tuesday, Biti said.

After approval by Cabinet the draft law will be taken to Parliament which will gazette the bill, then wait for two weeks before it is tabled before legislators. The bill seeks to clip the wings of Gono and ring fence him to monetary policy formulation, and also eliminating his quasi-fiscal functions that permitted him to assume an omnipotent role in the national economy.

Gono was said to have been “subdued” as Cabinet unanimously backed the RBZ Amendment Bill to strip him of all powers, according to our source who we cannot name because of the Official Secrets Act which outlaws the disclosure of Cabinet deliberations.

The RBZ Amendment Bill got a policy go-ahead from Cabinet two months ago, and then Biti drafted the proposed legislation in conjunction with the drafting section of the Attorney General’s Office.

Some of the key proposals of the bill are that Gono should no longer chair the RBZ board and that a non-executive director takes over. The board will have 5 to 7 directors.
Gono will now only chair a Monetary Policy Committee (MPC), but he will be under the direction of the board. Gonos deputy governors will also not sit on the board.

The amendment also creates committees to look at audit, loans review, human resources, assets and liabilities, risk management at the central bank, and appraise the board on an on-going basis. The RBZ will now need approval from Parliament and the Finance minister before it contracts any obligations, or borrow from anyone.