Leaked docs detail RBZ’s extravagance

The RBZ spent US$215,403 on canteen expenses, US$109,395 on telephone calls, US$723,193 on school fees for senior staff at the central bank, US$111,605 on unnamed “office expenses” and US$114,750 on motor vehicle repairs for chefs’ cars between January and June 30, 2009. This is a bank which the nine-month-old interim administration is battling to rescue from near-collapse after it accrued US$2 billion in external debt which has to be cleared through taxpayers’ money.

Documents in our possession reveal that senior executives at the RBZ continue to enjoy a lavish ‘corporate hospitality’ package at their offices, including gourmet cuisine that has pushed the food bill to over US$215,000 in just six months.

Extravagance disgusting

The scale of the central bankers’ extravagance, described as ‘disgusting’ by one MP, has come to light in a confidential ‘RBZ Funds Outflow Statement’ leaked to The Zimbabwean from the central bank. Originally sent by a top central bank official, the shocking document sets out the unbridled extravagance at the central bank by senior executives.

The bank, which also runs a gym for executives in the tower along Samora Machel Avenue, has reserved plush treatment for its chefs, running up US$2,614,062.37 in “salaries, allowances and travel” in the six month period.

Surprisingly, the statement says the RBZ has failed to pay salaries to most of the staff. “Salaries: For the period January to September the bank owes staff USD (sic) in unpaid salaries due to unavailability of funds. Amid this crisis, the bank executives splashed out US$872,307 in IT software.

While RBZ governor Gideon Gono was not immediately available for comment, a senior official who said he was not authorised to speak to the Press justified the expenditure by saying that corporate comfort was ‘vital’ to retaining critical staff and also to the bank’s success.

But news of the lavish spending was met with disbelief. The Zimbabwean understands the statement revealing the lavish spending was forwarded to President Mugabe, Prime Minister Morgan Tsvangirai and Deputy Prime Minister Arthur Mutambara by Finance minister Tendai Biti.

Greed feeding greed

Political commentator Ronald Shumba called it “totally insensitive” and said the “public mood will not tolerate this kind of self-serving extravagance”. He added: “It’s not acceptable for corporate fat cats to have a good time at the public expense. It is totally disgusting. There is no place whatsoever for this kind of largesse at the current time. “These people are quaffing champagne while making their employees redundant. This is greed feeding greed.”

Amid such extravagance at the top echelons, the RBZ has ordered loss of privileges for most of shop floor and middle staff as well as job reductions, and has asked employees to tighten their belts after measures undertaken to rationalise operations at the central bank had caused serious cash flow problems. However, there is no sign that top management is cutting its spending in response to the scarcity of foreign currency afflicting the government.

The central bank, which was taken to the brink of collapse the incumbent governor, Gideon Gono, was saved only by interventions by the inclusive government, which ordered the death of the Zimbabwe dollar and use of foreign currencies. The Zimbabwean can reveal that the central bank claims it gobbled US$5,321,420.69 on operating expenses between January and June this year, listed as rentals, advertising, publications, stationery, electricity and water, and insurance. The total expenditure was US$41 million for the six months.

The Foreign Currency Account was withdrawn to the tune of US$3,763,762 in the six months, money ostensibly used to run the diplomatic centre (US$628,762), the COMESA Clearing House (US$390,000) and other unspecified “FCA withdrawals”.

Dubious govt payouts

The Reserve Bank claimed to have made government payments of US$8,620,000. The RBZ claims it bailed out national airline Air Zimbabwe with US$5,200,000. Its surprising that with this kind of money, the airline could contemplate laying off over 700 workers, a dispute that is currently playing out in the Labour Court. The RBZ also claims to have paid embassy staff US$3,420,000.00. This disclosure comes as Zimbabwe National Chamber of Commerce has called on government to work towards the reduction in the number of Zimbabwean embassies, consulates and missions abroad.

Zimbabwe runs 38 embassies and three consulates, 16 of them in Africa. “The government should reduce foreign trips or use affordable air travel classes, reduce delegation size, cut embassy staff and foreign missions,” ZNCC said in a position paper ahead of the national budget presented in Parliament by Biti Wednesday.

The statement says the RBZ used US$23,885,399 to pay its creditors. The creditors are listed as Mashonaland Tobacco, Accent Finance, NorthPark, Ravenscourt, FBC Bank, Cargill, InterAfrica, Alshams, Oasis Motors, Alex Stewart International, PTA Bank and the MBCA Bank. The statement said the RBZ was forced to pay off the debts above because of personal litigation threats against Gono.

“These loans were paid due to stringent due processes initiated suing the bank and the governor in his personal capacity,” said the fund outflow statement. The statement says the RBZ also paid US$5,519,452.00 towards the Presidential Scholarship Fund. But students studying in universities such as Fort Hare on the scholarship are facing difficult times because of problems with disbursement of their grants.

Tonderai Kunyaye, a student who was recently expelled from Fort Hare University after lifting the lid on theft of the scholarship fund told The Zimbabwean this week: “The situation is very bad. Students (on the presidential scholarship) are struggling, they are not getting much and right now there is a problem with pay out for their Christmas vacation.