Biti moves to rein in Gono

The Reserve Bank of Zimbabwe Amendment Act, which proposes an overhaul of the central bank operations, will see Gono referring most key decisions to a nine-member board of directors or the Minister of Finance for approval.

While Gono will chair the board, his role will now be largely ceremonial, announcing decisions made by a proposed monetary policy committee.

The committee will be independent of the board and consists of the governor as chairperson and not less than five or more than seven other persons appointed by the President after consultation with the Finance Minister.

The monetary policy committee will be made up of bankers with knowledge, experience or expertise in matters relating to finance, banking and fiscal or monetary policy.

The committee will determine the monetary policy of Zimbabwe, including the setting of limits on open market operations by the RBZ as well as ensuring price stability as defined by the governments inflation target set out in the national budget.

It will also be responsible for the determination of interest rates in line with the governments economic policies and targets for growth and employment.

In another sign that Biti wants to maintain a watchful eye on the RBZ, the minister proposes the establishment of a board committee to be chaired by the permanent secretary in his ministry, which will oversee operations of the central bank.

Consisting of all board members, the oversight committee will meet twice a year to consider the report of a proposed audit committee and review the banks operations to ensure that they are conducted in compliance with the RBZ Act and in accordance with best corporate practice.

Gono has come under fire for his out-of-budget expenditures since taking office in 2003, which have been blamed for Zimbabwes unprecedented economic decline during the past five years.