COMMENT – Newsday July 20 2010
Beneficiaries must pay RBZ debt
Finance minister Tendai Biti is keen to prevent asset-stripping at the Reserve Bank of Zimbabwe. In his mid-term monetary policy statement last week, Biti announced that he would present to Parliament an RBZ Debt Restructuring Bill before the end of August as part of efforts to retire the huge $1.5 billion arrears saddling the central bank.
Biti said that government’s strategy in restructuring the debt entails hiving off the monies owing from the central bank through a special purpose vehicle with a view to appropriately settle proven claims from sales of assets, investment returns or allocated resources.
He said disposal of non-core assets shall employ a transparent process aimed at obtaining full market value of any such assets. The plan to refinance the central bank is a noble one but the so-called debts incurred by the bank must be handled carefully.
The debts are a product of quasi-fiscal activities which government has said were necessary to counter the effects of targeted sanctions imposed by the West. What is critical though is to examine the nature of activities which have left the central bank in debt to ensure that the liability is transferred to the right persons.
Creditors have attached properties and implements after securing court rulings in cases which involved non-payment for the goods purchased.
Goods worth millions of dollars have been auctioned off and there are still many cases outstanding. The Ministry of Finance has stepped in to stop the auctioning of the goods but the debts at the RBZ will still need to be paid hence Biti’s plans for the setting up of a special purpose vehicle.
It will however be a serious travesty of justice if the liability for the RBZ debt is thrown on to the taxpayer’s lap without first ensuring that those who got tractors and other implements from the central bank pay up.
There is no reason whatsoever for the state through the RBZ to pay for tractors that are being used by able-bodied people who are pocketing profits from farming activities yet they invested nothing in the businesses.
The tractor owners must just pay up to Farmec and other suppliers or have the tractors attached for the debt. So as part of the RBZ debt retirement plan, an audit must be instituted to identify beneficiaries of the implements scheme and to ensure that they are invoiced.
They were given these tractors and combine harvesters in public and equally so, the nation needs to be told about the state of the implements and the quantum owed to central bank.
The beneficiaries have resisted such an audit in the past because they believe the implements were gifts from their benevolent leader. Far from that; they should just look at what the largesse has done to the central bank and this economy.
This is time to pay up.