Farmers seek legal action over RBZ debts
http://www.thezimbabwean.co.uk
Written by Staff reporter
Friday, 14 May 2010 10:24
HARARE – The Reserve Bank of Zimbabwe (RBZ)’s financial woes are likely to deepen as it emerged last week that a union representing white farmers plans to institute legal action against the central bank to recover export
proceeds looted by the central bank before 2009. (Pictured: RBZ governor Gideon Gono – BROKE!)
The Commercial Farmers Union said in a notice to members that it was considering undertaking court action against the RBZ to recover millions of US dollars seized by the central bank from commercial farmers who exported crops but had their bank accounts raided by RBZ governor Gideon Gono. At the height of Zimbabwe’s currency crisis between 2007 and 2008, which coincided with the RBZ-induced hyperinflationary environment, many of the country’s farmers concentrated on producing commodities which were exportable or attracted payment in foreign exchange.
“Government in turn also brought in many controls to monitor and control the foreign exchange situation which resulted in many of our farmers losing millions of United States dollars in capital, which had been seized by the
Reserve Bank of Zimbabwe,” the union said.
It did not say how much the farmers are still owed by the central bank. Describing the situation as untenable, the CFU said the “only solution lies though the intervention of the courts”. “We are therefore prepared to
undertake a joint court action on
behalf of all those members of the Commercial Farmers’ Union who are still owed money by the Reserve Bank of Zimbabwe,” the notice said.
The planned CFU court action is likely to add pressure on the bankrupt RBZ which has already seen its assets attached by other creditors. In the latest case, 100 buses belonging to the RBZ were this month attached to offset a US$1, 5 million debt for seeds supplied by a South African company in 2006. The attachment of the buses follows a ruling made in late March by Harare High Court judge Justice Lavender Makoni in favour of Advance Seed South Africa. It is understood that the central bank intended to set up a
transport company before the formation of the inclusive government.
Advanced Seed is the third company that has so far attached RBZ assets after Farmtec Spares and Implements as well as Seed Co. The central bank owed Farmtec Spares and Implements approximately US$2.1 million for 60 tractors ordered in 2006 for the farm mechanization programme.
The mechanization scheme was one of the quasi-fiscal activities conducted by the RBZ on behalf of the government and funded by printing vast amounts of Zimbabwean dollars, leading to the rapid depreciation of the currency and the worst episode of hyperinflation in history.