Deadline for bank reform bill

mugabe_splashHARARE - President Robert Mugabe (Pictured) has until next Tuesday to sign a bill to reform the central bank, including reducing the powers of the bank governor who many accuse of ruining the economy.

The continued tenure of central bank governor Gideon Gono, who is allegedly destined to be posted to South Africa to assume the role of ambassador in a deal brokered by South Africa President Jacob Zuma last week, has blocked the unity government’s attempts to attract funding from foreign donors for the fiscus because they feared the money could be misused by the Reserve Bank.

If Mugabe assents and signs the bill into law, it will mark the first major law to be passed by parliament since the formation of a unity government between Prime Minister Morgan Tsvangirai and rival President Robert Mugabe in February last year. The Reserve Bank of Zimbabwe Bill will reduce the powers of the governor by appointing an independent chairperson and board, and restrict the bank to dealing with interest rates, currency management and regulating banks. The governor’s core function would be to chair a planned monetary policy committee.

Mugabe received the Bill from Parliament on March 9 after it was passed by the Senate after a three week hold-up. He must within 21 days make up his mind either to assent to the Bill or to withhold his assent. If the President does not assent, the Bill must be returned to Parliament. The Bill was eventually passed in its original form in the Senate as amended and passed by the House of Assembly last year. Senator Monica Mutsvangwa of Zanu (PF) had tabled nine amendments and accused Finance minister Tendai Biti of targeting the central bank governor Gono, a Mugabe ally with whom Biti has had an uneasy relationship.

But an agreement was reached between MDC and Zanu (PF) lawmakers to pass the bill in its original form without further amendments, after the MDC threatened to annul a clause giving immunity to the bank governor and employees “for anything done in good faith and without negligence”. Zanu (PF) MPs were whipped into supporting the bill at a caucus meeting after Biti argued that Senator Mutsvangwa was going back on issues already agreed to in Cabinet and the Lower House. Critics blame Gono for policies that helped cripple the economy – stoking inflation by printing money and taking over functions of the national treasury, including buying farming inputs and extending financial support to government departments.

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