Blocked-funds payment scheme unchanged

Zvamaida Murwira

Senior Reporter

Blocked funds are being paid out by the Government precisely as laid down over 15 months ago when Treasury took over the liability from the Reserve Bank of Zimbabwe, and will continue to do so.

Treasury will neither entertain requests for payment deviations from recipients nor deal with agents or other third parties as some are understood to be trying to do.

Cash payments of US$19 million have been made and US denominated Treasury Bills with a face value of US$1,485 billion have been issued.

Blocked funds or legacy debts constitute debts and funds that Zimbabwean entities incurred from foreign entities for goods, services and dividends and were unable to pay due to a shortage of foreign currency.

In a statement, Secretary for Finance and Economic Development, Mr George Guvamatanga said Government had come up with the structured payment modality through an Act of Parliament and it was adhering to this without deviation and would continue to adhere to it.

“The Government of Zimbabwe through the Treasury assumed the blocked funds through the Finance Act No 7 of 2021 which provided the list of claimants approved and registered by the Reserve Bank of Zimbabwe through the commercial banks of the claimants.

“This was to facilitate the assumption of blocked funds by the Government from the RBZ following a series of currency reforms from the multi-currency system to the introduction of mono-currency and a flexible exchange rate regime,” said Mr Guvamatanga.

So as to expunge the blocked funds owed to each claimant listed in Finance Act No 7 of 2021, a structured settlement modalities had been approved by Cabinet and Parliament in November 2021.

All claimants of less than US$1 million were being paid out in cash over five years starting in June last year. The list was the RBZ approved and registered claimants list as at 30 June last year amounting to US$51 million.

“To date, Treasury has made payments amounting US$19 million with a balance of US$ 32 million which will be paid from April 2023 to September 2026,” said Mr Guvamatanga.

Larger debts were being paid out by issuing zero coupon Treasury Bonds.

“All claimants with amounts above US$1 million were issued with zero coupon Treasury Bonds ranging from 3 to 20 years based on the outstanding amount. To date total TBs amounting US$1,485 billion have been issued. These TBs are tradeable, have liquid asset and prescribed asset status and are categorised.”

He stressed that Treasury would not deviate from the approved modalities and would not entertain inquiries from third parties.

“Treasury has noted a significant amount of appeals from claimants for the deviation from the approved settlement modalities.

“These appeals cannot be acceded to and are not sustainable. The claimants are therefore advised that Treasury will adhere to the approved settlement modalities.

“In addition, Treasury noted with concern the appeals being made for payment through purported representatives, agents or consultants of the claimants. Treasury wishes to advise that it will not deal with third parties on claims of blocked funds and will not entertain anyone claiming to be representatives of the claimants of blocked funds.

“Claimants are therefore advised to directly approach Treasury if there are any issues or discrepancies requiring attention.

“This will assist in ensuring that all the claims are diligently settled in line with Treasury’s Governance Charter,” said Mr Guvamatanga.

In terms of the Finance Act No 7 of 2021 a creditor means a legal person, or the person’s successor in title, who, being a foreign counterparty, provided a loan or advance or goods or services to a person resident in Zimbabwe and was entitled to such payment for goods and services or dividend or return on investment in foreign currency, but where the foreign currency could not be repatriated from Zimbabwe.

The approved claimants all submitted their claims by April 30, 2020, for validation by the Reserve Bank of Zimbabwe, before Treasury was given the directive by Parliament to pay out the money in the scheme that is being and has been implemented.