RBZ overstates amounts owed to creditors

via RBZ overstates amounts owed to creditors – NewsDay Zimbabwe February 3, 2015

Parliament yesterday breathed fire over what it called “glaring errors” and overstatement of amounts owed to creditors by the Reserve Bank of Zimbabwe (RBZ) by margins of 20% to a whopping 2 500% as stated in the Reserve Bank of Zimbabwe Debt Assumption Bill currently before the National Assembly.

Finance minister Patrick Chinamasa and RBZ governor John Mangudya were told by members of the Budget, Finance and Economic Development Portfolio Committee that the Bill would not pass through Parliament unless an urgent audit of the inflated figures leading to the $1,7 billion RBZ debt was done.

Chairman of the committee David Chapfika (Mutoko South MP Zanu PF) said there was need for verification of the quantum of the debt, review of the exorbitant interest rates charged, and he asked Chinamasa and Mangudya to explain the legality of issuing Treasury Bills of $50 million to Meikles before the Bill was passed and figures verified by Parliament.

Bikita West MP Munyaradzi Kereke (Zanu PF) pointed out the glaring errors in the Bill, some of them that included a $1,7 million loan owed to FBC and Afre Zimbank in December 2008, but which debt had since grown to $43 million.

“That is a serious oversight because of an overstatement of
$40 million and ASP Marketing of South Africa which supplies agro chemicals listed its debts as $25,8 million and there is no way that sum could now have risen to $41,2 million, while gold bonds are listed as $30,6 million, yet as certified by the IMF and certain auditors the amount was listed as $21 million causing a variance of
$9,4 million,” Kereke said.

“Foreign currency accounts (FCAs) for corporates are actually $70,5 million, but it is suggested they are $132 million, suggesting that interest rates are 12% per annum, which is a figure we urge government to look at because these banks give interest rates of 0,1% per annum and yet they want to charge government interest of 12%,” he said.

Other anomalies pointed out by Kereke on behalf of the committee included parastatals that suggested they were owed $67 million and the figure was later overstated to $99 million and yet RBZ audited statements suggested the amount owed was only $35 million.

They also questioned why the Meikles debt from 1998 accrued under the then RBZ governor (Leonard Tsumba) of $34, 1 million had suddenly shot up to $90 million as reported by the Zimbabwe Stock Exchange, as well as why Treasury Bills of $50 million had already been awarded to Meikles before Parliament approval.

An overstatement of $26 million was also noted in the case of the BancABC debt, while claims by MBCA and Afre Zimbank that a commission of $1,8 million should be paid to them was said to be suspicious.

“If Parliament passes this Bill with the glaring errors the risk is it will expose legislators as inefficient people. As a matter of principle Parliament should not be asked to rubberstamp things and the issue of these creditors should be verified and audited,” Kereke said.

Chinamasa agreed that an audit of the figures should be thoroughly carried out and the amounts verified and validated, and cases of fraud unearthed if there were any.

“Where I am standing I want fairness to the State, creditors and the RBZ and that can only be done if we are thorough in interrogating what is owing to the creditors. The element of transparency is needed, and it is true all these debts were incurred on the authority of the State as it was done in emergency situations,” Chinamasa said.

He said there was nothing wrong with issuing Treasury Bills to Meikles as it was also impossible for his ministry to seek Parliament clearance for all amounts, adding it was imperative for the debts to be honoured and the amounts paid for the sake of the economy.

Mangudya urged MPs to pass the Bill saying it would kill confidence if they failed to do so.

“In the case of Meikles we said there is no scope for government to pay $90 million and we reduced the figure by $26 million. We are negotiating with the creditors, and the figures in the RBZ Debt Assumption Bill are being reduced. Auditing and verification of the figures should be done,” he said.

Chinamasa urged MPs to allow the Bill to sail through the Second Reading Stage today and afterwards amendments of the overstated amounts would be done during the Committee Stage where the Bill is scrutinised clause by clause.

The amounts owed to creditors by RBZ will be paid by Zimbabweans if the Bill is passed.