HARARE - Zimbabwe will soon come to the market to seek more funds, through the issuance of treasury bills, aimed at clearing the $1,3 billion central bank debt, businessdaily has learnt.
Reserve Bank of Zimbabwe (RBZ) governor John Mangudya said government has already paid over $600 million to creditors since the Debt Assumption Bill was signed into law mid-last year.
“The $1,35 billion is comprised of local and foreign creditors, more has been issued for the local creditors. Now that the debt assumption is an Act, we are moving to ensure that we pay. The implementation of the Act is a top priority with us at the moment,” the central bank chief said.
Mangudya also said the apex bank was also crafting a mechanism to pay foreign creditors as issued instruments had not catered for this group.
“The debt management office is working to verify foreign claims before more instruments are issued,” he said.
The central bank chief also said while $600 million debt instruments had been issued, the $800 million balance was going to be settled over a period of time.
“The balance is still being verified because before issuing the debt instrument we need to verify the authenticity of the claims. The process is on-going and we will not complete everything overnight, but we are certain the assessment of claims will be complete by year end,” Mangudya said.
The Debt Assumption Bill sailed through Parliament last year, after 115 legislators voted for the piece of legislation while 37 voted against the motion.
The Act seeks to provide settlement of certain liabilities incurred by the bank.
In terms of the legislative piece, the State will assume the debts which were incurred by the RBZ before December 31, 2008.
According to the Act, the Debt Management Office, a department of the ministry of Finance which was set up in 2010, is validating and reconciling the bank’s debts.
Analysts warned government lacked capacity to assume the central bank debt, as the country is already overburdened with foreign debt.
Zimbabwe currently has a debt overhang of nearly $7 billion and civic society had called for a public audit before debt assumption.
However, Mangudya said government wanted to clean the RBZ’s balance sheet thus necessitating the drastic move.