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Seed Co International Sues Reserve Bank of Zimbabwe to Recover US$3.6 million Debt

Reports said the Reserve Bank ordered US$13 million in maize seed from Seed Co. International in 2007 and 2008, paid US$10 million of that, then failed to pay the balance as promised

The Reserve Bank of Zimbabwe has been sued by Seed Co. International of Botswana, one of the largest maize and small grain seed suppliers in the Southern African region, over the nonpayment of a US$3.6 million debt outstanding since 2008.

Reports said the central bank ordered maize seed worth more than US$13 million dollars from the firm in 2007 and 2008, paid about US$10 million of that, then failed to keep its promise to pay the balance gradually in installments of US$400,000.

Seed Co. filed suit in the High Court last November and has since filed an application for a default judgment after the RBZ failed to respond to a summons.

Reports said High Court Justice Charles Hungwe is to rule in the matter in the next few days.

Commentator Bekithemba Mhlanga said that as the central bank is by all accounts insolvent, the Finance Ministry may be obliged to settle its debts.

Mhlanga said the government may be liable for RBZ debts as the institution was established by Parliament "even if it is clear that it was undertaking most of the quasi-fiscal operations on the strength and basis" of instructions by ZANU-PF heavyweights.