The Reserve Bank of Zimbabwe (RBZ) failed to pay local and foreign companies about US$1 billion mainly for fertiliser, seed, tractor and vehicle imports at the 2008 peak of an economic crisis which many people blame on President Robert Mugabe’s policies.
Mugabe last Friday invoked the Presidential Powers (Temporary Measures) Act amending the Reserve Bank Act. The action essentially converted the central banks staggering debts into State liability. The RBZ’s debts are now the Zimbabwe government’s debts.
Recent media reports said the Attorney Generals office had deemed the auctioning of the central banks assets illegal. Several senior government and army officials were said to have benefitted from the auctions through buying the banks assets for a song.
The gazetting of the presidential powers halted a planned auction of RBZ property in Bulawayo. The statutory instrument published Friday in an extraordinary gazette said: “The Reserve Bank of Zimbabwe Act [Chapter 22:15] (No. 5 of 1999) is amended by the insertion of the following section after Section 63A.
“The State Liabilities Act [Chapter 22:13] applies with necessary changes to legal proceedings against the bank, including the substitution of references therein to a minister by references to the Governor.”
The new regulations will apply to proceedings against the RBZ that are pending on the date the regulations came into effect.
The regulations will be in force for six months during which Parliament should make the amendments permanent. Zimbabwe’s central bank, which the IMF has certified as broke and is struggling to pay its own workers, is now playing a marginal role in efforts to revive the country after being at the centre of the economy for years.
The Movement for Democratic Change blames Reserve Bank governor Gideon Gono, a Mugabe ally, for contributing to the economic collapse and wants the power-sharing government to appoint a new governor. Mugabe denies that he has vandalised the economy, and blames instead targeted sanctions which he claims were imposed in retaliation to his policy of grabbing land from white commercial farmers.
Post published in: Opinions