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Minister, RBZ Boss Grilled Over $1,35 Billion Central Bank Debt

The Zimbabwe government’s bid to assume the more than $1 billion Reserve Bank of Zimbabwe debt took centre stage in parliament Monday when thematic and portfolio committees resumed sitting after their Christmas and New Year recess.

Finance Minister Patrick Chinamasa and central bank chief John Mangudya were grilled by parliamentarians about some alleged discrepancies in the $1,35 billion debt schedule with concerns that some figures were inflated.

Former advisor to then central bank chief Gideon Gono and now MP, Munyaradzi Kereke, led the charge when he raised alarm after the creditors’ schedule in the case of Meikles, whose $90 million debt ended up being pegged at $341 million.

Chinamasa and Mangudya then promised parliament that they will refine the creditors schedule.

The central bank debt was accrued from quasi-fiscal activities conducted by then central bank chief Gideon Gono. The activities included subsidised direct lending, subsidised cost of providing equipment and fertilizers to farmers and the allocation of foreign currency at subsidised exchange rates.

Last year Zimbabweans told the parliamentary committee during an outreach programme that they were against the government’s move to assume the debt after the central bank refused to release the list of the beneficiaries of the quasi-fiscal operations of the bank.

Some leading economists have also expressed concern at the move saying government is already saddled with a debt trap of up to $8 billion.

Chinamasa and Mangudya pleaded with parliament to pass the bill saying the debt overhang is affecting the operations of the central bank and making it fail to discharge its mandate as the lender of last resort.

But parliamentarians querried why some loans have ballooned, forcing Chinamasa and Mangudya to go and revise the figures.

A member of the parliamentary finance committee Willas Madzimure of the opposition MDC Renewal Team told VOA that the government and central bank are still reluctant to release the full list of the beneficiaries of the RBZ's quasi fiscal operations believed to be senior government and ruling Zanu-PF officials.

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In his defense, Gono said quasi-fiscal measures were necessitated by a complete “abrogation of duty by some of the responsible government ministries, boards and management teams at some of the parastatals and local authorities”.

“Instances where some of these entities had gone for many years without a shred of audited sets of accounts reflects just but one example of this unfortunate state of affairs that was fast turning into a plague,” Gono said at the time.