Byo rejects RBZ Debt Assumption Bill

via Byo rejects RBZ Debt Assumption Bill – DailyNews Live 24 September 2014 by Mugove Tafirenyika

BULAWAYO – Bulawayo residents have turned down the Reserve Bank of Zimbabwe (RBZ) Debt Assumption Bill, arguing that they are not prepared to subsidise government’s “extravagance and foolish decisions”.

This comes amid growing consensus that the $1,1 billion debt — incurred through quasi fiscal activities in Zimbabwe’s pre-dollarisation era — must be audited first, as it will burden ordinary Zimbabweans through higher taxes.

Giving their views to Parliament’s finance and economic development committee last week, the Bulawayo residents argued that government should not assume the debt since they, as ordinary Zimbabweans, did not enjoy the benefits of RBZ’s activities, which culminated in the debt.

During the meeting, irate residents said the central bank’s activities were not meant for national projects or development, particularly at a time Bulawayo industries were shutting down, rendering them jobless.

Prosper Chikomo, a Bulawayo resident, said government should rather assume the debts of struggling Bulawayo firms.

“Bulawayo is dead. We did not benefit from the youth fund as Bulawayo and we have never enjoyed the benefits of being Zimbabweans so I don’t see why we should pay for their extravagance and (wrong) decisions,” he said.

Percy Mcijo, who represented the Zimbabwe congress of Trade Unions (ZCTU), said it was not fair for government to further burden workers whose salaries are below the poverty datum line.

He said government must seek funding elsewhere.

“I do not think the timing by government to assume the debt is right considering that it already is saddled with an almost $10 billion debt at a time the economy is crumbling. It is prudent to look for other sources of revenue rather than squeeze the already struggling worker,” said Mcijo.

He added that the RBZ did not consult them at the time decisions that led to the debt were made.

Nomalanga Ncube added: “Now government realises that we are important simply because we have to settle the RBZ debt, but we are saying we do not want to pay for what we did not eat. Those who benefitted should pay or the bank should come up with a payment plan. Bulawayo says no to that, we are poor already.”

Youth organisations also said they did not support the Debt Assumption Bill as “it will not lead to creation of jobs”.

According latest tax rankings, Zimbabweans are among the most heavily-taxed, and this debt assumption comes as a heavy blow for the ordinary man in the streets.

Among its dues, the RBZ has an institutional debt of $110 million, $80,2 million in central bank lines of credit, a sovereign debt of $452,6 million, and local debt of about $440 million.

Earlier, Mutare residents said beneficiaries of RBZ’s farm mechanisation programme should pay back to ease the burden on ordinary taxpayers.

“Why should tax payers fund someone’s personal projects. There are so many capable people who benefitted from government’s programmes, these are the people who should be invoiced,” said Regai Tsunga.