Mutare residents on Monday expressed reservations at the Reserve Bank of Zimbabwe (Debt Assumption Bill) 2014, which, among other issues, seeks to take over and settle liabilities incurred by the RBZ before December 31, 2008. If passed into law, the government will take over the debt worth over $1,3 billion.
Mutare residents raised their concern during a consultation meeting called by parliament’s finance committee and was chaired by lawmaker David Chapfika.
The residents said the proposed law will ease the burden on over-taxed citizens, who did not even benefit from the money borrowed by the bank.
The RBZ was criticized during Gideon Gono’s era for engaging in quasi-fiscal activities, which involved handing out farm equipment and agricultural inputs to farmers.
Mutare residents said only those who supported Zanu PF and were well-connected benefited from the schemes. They said the beneficiaries should pay back the money.
The residents argued that the Bill should only tackle the RBZ’s debt that was incurred to mitigate against drought and other natural disasters.
The $1,3 billion debt, accrued between 1991 and December 31, 2008, is shared between 33 non-governmental organizations, local and foreign banks, local and foreign firms which provided funds, services and goods, among other services, to mostly quasi-government institutions, departments and ministries.
Freeman Bhoso, a Mutare resident says it would be unjust and cruel to make the RBZ foot the entire debt as some institutions and individuals behind the debt are able to repay what they owe.
He says beneficiaries of the $2, 8 million owed to a Chinese firm, Daedong, which supplied tractors for the mechanization programme that benefitted farmers, should be forced to pay the bank outstanding loans.
David Mutambirwa of the Mutare Residents and Ratepayers Associations says if the bill is passed into law, Zimbabweans will be worse off than they currently are.
Andy Ziyera, a Mutare man who attended Monday’s half-day RBZ Debt Assumption Bill consultation meeting in the city, says the RBZ only needs to categorize the debt into two.
He says the central bank only needs to assume the debt which was accrued to bankroll programmes that were nationalistic such as the purchasing of drugs and drought relief.
But, new farmer and businessman, Charles Tavazadza disagrees, saying the debt has to be taken over by the government.
He adds that the central bank should first service the country’s foreign debt to regain international trust before honouring local creditors.
Tavazadza says there is need to review the debt and identify capable institutions and individuals that benefitted from the loans and force them to pay part of what they owe than for the government to summarily take over the entire debt.
Finance portfolio committee chairperson, David Chapfika, says his team is on a fact-finding mission, which will take them to Bulawayo, Gweru and Harare.
Some of the creditors include the National Merchant Bank. NMB, Kingdom, Econet Bonds, Anglo-American, Zimasco, Gratton Cotton, Bank ABC, Mimosa, Zimplants, Oasis Motors, Reserve Bank of Malawi, Eximbank China, bank of Negara Malaysia, including Zimbabwe based non-governmental organizations.