RBZ creditors agree to lower payments

HARARE - The Reserve Bank of Zimbabwe (RBZ) is negotiating with creditors in an effort to reduce and find ways to pay off its staggering $1,35 billion debt.

John Mangudya, the RBZ governor, told Parliament this week that discussions are on-going with the various creditors, some of them owed for more than a decade.

“…at the moment, the country does not have money and most of the cases we are negotiating,” he said, adding that “we took people’s money and as Zimbabwe we need to honour our debts as a way of building confidence in the economy”.

Mangudya said the central bank had so far successfully negotiated with Meikles Limited Africa to lower its 16-year debt by $26 million from $90 million and expressed confidence that the overall debt “is going to be lower than initially put”.

The RBZ accumulated the debt through raiding foreign currency accounts it held for private firms, to support national programmes at the height of the hyper-inflationary period.

The funds were mainly used to bankroll quasi-fiscal activities.

Among the 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.

This comes after government last year gazetted the RBZ Debt Assumption Bill to take over the apex bank’s $1,35 billion debts.

The Bill seeks to provide settlement of certain liabilities incurred by the central bank.

In terms of the Bill, the State would assume debts incurred by the RBZ before December 31, 2008.

However, Zimbabweans, who are among the heavily-taxed in the world, have been resisting the move.

David Chapfika, chairperson of Parliament’s Finance committee said an audit must be conducted to verify the exact quantum of the RBZ debt before the Bill is passed into law.

“Some of the issues raised by people were on the verification of the quantum of the debt. The feeling was that where we are dealing with a debt let’s have a comprehensive solution to the challenges.

“Although there was concern from various stakeholders we as a committee reached consensuses that after the amounts are verified, the activity is a noble one to relieve the central bank of that burden,”said Chapfika.

 

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