The Reserve Bank of Zimbabwe (RBZ) has since 2013 abused the overdraft mechanism to borrow close to a billion dollars without the consent nor knowledge of the Parliament of Zimbabwe, it has emerged.
According to the Constitution, the central bank should notify and also get approval from Parliament before it borrows from external financiers.
However, appearing before the Parliamentary Public Accounts Committee this afternoon, RBZ Governor Dr John Mangudya said loans accumulated by the bank externally in the past 5 years reached $US 985 million, though he insisted that they followed the mandatory steps as outlined in the Reserve Bank of Zimbabwe Act.
“The bank followed processes as outlined in the RBZ Act, it states that the bank should be able to borrow where it sees fit with the consent and approval of the Minister of Finance and all these steps were done in accordance to the RBZ Act and we did this with the approval of the minister,” said Dr Mangudya.
Reminding the Governor that the RBZ Act was subservient to the Constitution of Zimbabwe, Public Accounts Committee chairperson, Tendai Biti said the Central Bank erred in perpetually borrowing externally without the approval of Parliament as this drew back the country’s efforts to curb growing debt.
“We are talking of compliance here. Parliament has to approve this debt, and in this case none of these loans, they are actually news to us, if you saw every Honorable member was writing frantically, they are news to us meaning they are news to the country, so how come you have been acquiring almost up to a billion dollars debt without Parliamentary approval and you see our problems, you’ve got $1.3 billion (debt) in RTGS (through) ZAMCO, now you got almost a billion and that’s a lot of money governor, $ 2 billion, so why has these loans not been approved by Parliament as is required by Constitution of Zimbabwe,” quizzed Biti.
Between the period 2013 to 2018 RBZ accrued loans from Afrexim Bank ($641 millions), PTA Bank ($152 million), Bank of Mozambique ($25 million), PTA Renaissance Corporation ($ 9 million) and ADB ($ 15 million ) among other financiers.
