Govt divided on $1,2m RBZ debt

reserve_bankHARARE The beneficiaries of the Reserve Banks trillions of dollars spent to prop up the collapsing regime of President Robert Mugabe and Zanu (PF) between 2000 and 2008 must pay it back.

The Confederation of Zimbabwe Industries has the central bank’s quasi-fiscal activities saw the RBZ pump huge amounts into financing Mugabes populist projects and the beneficiaries must assume the bank’s US$1.2 billion debt.

Finance Minister Tendai Biti said last week that government was sharply divided on how to handle the debt, with Zanu (PF) officials determined to scuttle a Cabinet probe into how the staggering debt was accrued in the first place. The MDC is insisting on accountability before a settlement plan is executed.

The CZI has waded into the furore, suggesting that beneficiaries of the farm mechanisation programme repay for the implements donated by the RBZ on behalf of Zanu (PF). CZI president Joseph Kanyekanye proposed that “beneficiaries of farm mechanization programmes from which the debt was largely accrued, assume the debt with government taking up the remaining debt.”

The CZI proposed a number of ways on how government can raise money to pay off this debt, including “conversion of debt into long term government bonds” and “identification of government assets for privatization, earmarking proceeds to liquidating the RBZ debt.”

Biti recently told a discussion panel, dubbed Independent Dialogue, that the issue of the RBZ debt has been seriously politicised in Cabinet. “There are some who feel that government should take over this debt without asking any questions. This is where there will be a fight. It’s a matter of principle for me that no one can force me to change,” Biti said.

The government was forced to take over the RBZ debt after creditors owed millions of dollars by the bankrupt central bank started auctioning the bank’s property. The RBZ has contributed US$1,2 billion of the country’s US$6,4 billion external debt and arrears.

Post published in: Economy

Leave a Reply

Your email address will not be published. Required fields are marked *