Zimbabwe floats $103M Treasury bills to clear RBZ debt

via Govt floats $103 mln Treasury bills to clear RBZ debt | The Source   April 7, 2014

Government has issued Treasury Bills worth $103 million to repay part of the central bank’s debt to banks and farmers which accumulated during the pre-dollarisation period, Parliament heard on Monday.

The central bank has a $1,35 billion debt, due mostly to gold miners, banks and exporters after raiding their foreign currency accounts to fund the cash-strapped government.

Zimbabwe’s own currency fell victim to hyperinflation, which reached 500 billion percent in 2009, forcing the government to adopt a basket of nine foreign currencies, including the greenback, the rand, Yuan and Pula.

“We have issued about $103 million worth of treasury bills to try and deal with some of the obligations that the Reserve Bank had with banks and tobacco farmers,” Ministry of Finance permanent secretary, Willard Manungo, told the parliamentary committee on finance and economic development.

The RBZ debt assumption bill approved by Cabinet in March would also be brought before Parliament for approval, he said.

Of the amount, $93 million will be repaid to banks and $10 million to tobacco farmers.

He said tobacco farmers were owed over $30 million and more TBs would be issued once the actual outstanding amount had been validated.

Members of Parliament requested Manungo to supply them with a breakdown of the RBZ debt, claiming that the figure could have been inflated.
Manungo said the ministry’s debt management office was in the process of validating the debt.

“What we are doing … is to go over each and every single debt and validate it and so at the end of the exercise we will be able to confirm the exact indebtedness of the Reserve Bank ,” Manungo said, adding that this process will be completed by first half of this year.

Chairman of the committee, David Chapfika, said in future the central bank’s borrowings should be monitored and approved by the (finance) ministry.

“The ministry should get involved as much as possible with what is going on at RBZ, especially at this difficult time (of the liquidity crisis),” he said.

Manungo said the borrowing arrangements were “fairly tight.”

“Any borrowing that will ultimately have a claim on the Consolidated Revenue Fund, the minister would have to sign on it and these will come through Parliament for ratification,” he said.

Bulawayo South MP, Eddie Cross wanted to know whether RBZ had assumed its role as the lender to government from CBZ Bank.

Manungo said treasury had been working with RBZ and CBZ on the administrative processes of transferring the role back to RBZ.

“Some of the activities that have been undertaken so far include setting up the platform for payments to link Treasury with RBZ. Last week we tested the link,” he said.

He said the RBZ and the ministry’s project office were also putting up structures to facilitate production of electronic bank statements, adding that the process of the transfer was at an “advanced stage.”

Manungo said government was yet to raise the $200 million to recapitalise the central bank.

On the $100 million Africa Export and Import Bank (Afreximbank) facility to revive the interbank market after its suspension four years ago, Manungo said the bank was finalising the facility agreement which would be signed by Treasury, RBZ and other participating banks.

“Currently all the participating banks are submitting all their eligible assets to Afreximbank,” he said.

As part of efforts to harness resources from the Diaspora, Manungo said the ministry was working with CBZ on modalities of issuing a $200 million bond to be guaranteed by Afreximbank.

“Financial advisors of CBZ are finalising the term sheets,” he said.

Manungo said government owed service providers close to $100 million as at December 31 mainly for electricity, water and telephone charges.

He attributed the debt to overspending by ministries and departments which he said were consuming more than their allocated budgets.

“We are working with the service providers to ensure that we align some of the expenditures to the levels we have indicated and we are doing that on a monthly basis,” he said.


  • comment-avatar
    Zimbo 8 years ago

    No thanks!

  • comment-avatar
    Jenandebvu 8 years ago

    Robing John to pay Paul. It appear the public will pay for the Treasury Bills on acquisition so as to pay RBZ debts to the public. It will not change n-thing as there is no capital injection intoo the system

  • comment-avatar
    John Thomas 8 years ago

    Do not buy zimbabwe government paper.

  • comment-avatar
    Roving Ambassador 8 years ago

    What a mess. Borrow from Peter to pay Paul.
    Watch out Peter and Paul, non of you will ever get your money back.
    ZANU policy.

    • comment-avatar
      Roving Ambassador 8 years ago

      Diaspora, remember Home link,you paid for houses that were never built.
      Be afraid. Be really afraid.

  • comment-avatar

    Yep! You are all right. I wouldn’t touch govt paper with a barge pole. judgment knocks at the door. And the govt slumbers on.

  • comment-avatar
    gorongoza 8 years ago

    who buys worthless bils? after all they wont even pay you when they mature. they can pay you in Zim dollars.

  • comment-avatar
    Sokomukanya 8 years ago

    These parliamentarians never questioned the balooning domestic debt. Chinamasa refused UN funding for elections now look where we are, instead of dealing with the economy Chinamasa wastes time officiating at police pass-out parade and defence college events. THis guy is not serious

  • comment-avatar
    Reader 8 years ago

    Don’t touch them.
    Things are going down, this is just like 2006/2009 printing worthless money only this time called treasury bills.

    And once these are sold they will print more and the value will drop, cannot even be linked to ZSE so they could be traded.

    Very soon they will again raid our bank accounts, very soon.

    Last kicks of a dying horse…………..

  • comment-avatar
    Jono Austin 8 years ago

    US dollar treasury bills-they can’t print to pay you back. No one will take this up, but let me guess-the pension funds will be forced to. Why don’t they just go ‘nationalise’ all the savings accounts while they’re at it.

  • comment-avatar
    moyokumusha 8 years ago

    Hu, and they want to add another US15billion in bonds to compensate the white farmers. So now there is no money, currency or business they want to survive on IOU’s and further impoverish the nation. We think the end is near but these crooks will keep going by which ever way they can think of.

    To buy any bond would be foolish as the holder will not even get the interest let alone repayment at maturity.

  • comment-avatar
    Mlimo 8 years ago

    Once you buy these it like getting aids nev get a cure or repayment and the end is nigh

  • comment-avatar
    Littledorrit 8 years ago

    RBZ raided forex EARNED by other people and then SPENT it on WHAT? Do tell us. Now needs to “validate” it’s debts. WHY? Surely it keeps records – or have they been destroyed?