via Debt Assumption Bill under public scrutiny – NewsDay Zimbabwe 15 September 2014
THE Parliamentary Portfolio Committee on Finance and Economic Development will conduct public hearings this week to get input from stakeholders on a proposed legislation to take over the Reserve Bank of Zimbabwe (RBZ) debt.
The hearings start in Mutare today before moving to Bulawayo tomorrow. The committee will move to Gweru on Wednesday winding up in Harare on Thursday.
In June, draft legislation to take over RBZ’s $1,35 billion debt was gazetted.
The Bill is under consideration by the Parliamentary Legal Committee.
In a notice on Friday, the portfolio committee said it would seek input from stakeholders at the hearings.
“The public, stakeholders, interested groups and organisations are invited to the hearings. The contributions made will be considered by the portfolio committee and will be part of the committee’s report to be tabled in the National Assembly,” the committee said.
The Bill seeks to provide settlement of certain liabilities incurred by the bank. In terms of the Bill, the State will assume the debts which were incurred by the RBZ before December 31 2008.
“Under this clause, the Minister of Finance and Economic Development on behalf of the State will assume the responsibility for the discharge of outstanding obligation of the RBZ under agreements and instruments of prior debts which are subject to validation and reconciliation,” the Bill read.
According to the Bill, the Debt Management Office, a department of the Ministry of Finance which was set up in 2010, would validate and reconcile the bank’s debts which the government has proposed to assume.
“All claims arising from prior debts shall be subjected to validation and reconciliation by the Debt Management Office and consequently, no claims will be settled unless it is so validated and reconciled. All prior debts that are not assumed by the State will continue to be the debts of the Reserve Bank,” the Bill read.
Clause 8 of the Bill states that after the Minister of Finance has been satisfied that all prior debts have been settled in terms of the Bill, “he or she will advise the President to repeal this law by notice in the Gazette”.
According to the Bill, the prior debts of the RBZ that are subjected to validation and reconciliation totalled $1 122 276 923,83 inclusive of arrears.
Under the multi-currency regime, some creditors obtained writs of execution and attached the assets of the central bank.
Government had to invoke the Presidential Powers (Temporary Measures) Act, to protect RBZ’s assets from being attached by various creditors after obtaining writs of execution.