Zimbabweans refuse to pay $1.3b RBZ debt

via Zimbabweans refuse to pay $1.3b RBZ debt 16/09/2014

ZIMBABWEANS on Tuesday told a parliamentary committee that only those who benefited from the central bank’s quasi-fiscal activities at the height of the country’s economic crisis should be made to pay for the mess.

Presenting their views to a parliamentary committee on budget and finance, residents of Mutare said treasury should not take up the $1.3 billion debt accrued by the central bank.

The residents said the RBZ should apologise to citizens for the “2009 mess” where majority of the banking public lost their fortunes during the migration to the multi-currency regime after years of record inflation.

A resident, Prosper Chikomo, said instead of paying the debt, the RBZ was better off liquidated and the government should focus on creating a new central bank or rather pour the money into ailing industries.

“This new bank should be taken seriously as well. We never benefitted from the RBZ’s activities, the government should not take this debt,” said Chikomo.

In December last year, treasury announced that it was assuming the RBZ debt and would repay all individuals and corporates that the central bank owed.

During the hyper-inflationary era, the central bank operated quasi-fiscal operations such as distribution of tractors to Zanu PF officials, paying salaries among other activities that are normally the duty of treasury.

Nomalanga Ncube, from Zimcodd, a civic group demanding transparency in debt management, said the RBZ Debt Assumption Bill should change its outlook, as it was biased and only focusing on corporates.

“Individuals and pensioners are not mentioned in this bill. It only prioritises paying corporates like the Bank of Malawi, what about us locals?

“The bill should serve locals first before anything. When this debt was incurred, people were suffering because it was at the height of the economic meltdown. The bill should address how livelihoods will improve this time around,” she said.

In Mutare, residents told the parliamentary committee which is chaired by Zanu PF MP, David Chapfika, that individuals who benefited from various government programmes should pay back loans, including for machinery and equipment given to them.

“I don’t know why it is doing that. Why should us, taxpayers, fund someone’s personal projects? There are so many capable people who benefited from government’s programmes, these are the people who should be invoiced,” said Regai Tsunga.

If the bill passes, the government will assume the $1,1billion debt which will be met by ordinary taxpayers, who are already over-squeezed by a barrage of taxes.

The Bill was published in the Government Gazette on June 13, 2014 and seeks to offload debt incurred by the Reserve Bank of Zimbabwe prior to December 2008 onto government and therefore effectively onto the taxpayer.

On Wednesday the Finance and Economic Development Portfolio Committee will be in Gweru and its final stop will be in Harare on Thursday before presenting their findings to the national assembly for consideration.