Melinda Kusemachibi
Former finance minister and Citizens Coalition for Change (CCC) vice president Tendai Biti has implored government to shut down the Reserve Bank of Zimbabwe (RBZ) arguing the central bank has become a liability than an asset to the nation and also claim the institution is being used by government to do unconstitutional businesses.
Speaking at Zimbabwe Public Debt Indaba hosted by Zimbabwe Coalition on Debt and Development (ZIMCODD) held on March 29, 2022 in Harare, Biti said Zimbabwe does not need an institution like RBZ, hence it should be shut down.
“RBZ has become the government, it has become the Ministry of Finance (Mthuli Ncube), and in my respectful opinion the RBZ must actually be shut down as Zimbabwe does not need it. Zimbabwe need a currency board not RBZ,” said Biti.
He went on to say that RBZ has never focused on its business mandate as it is being used as a political instrument.
“RBZ has never attended to its co-business. Besides it loves displacing the Ministry of Finance. All the RBZ is doing is play in quasi-fiscal activities which cost our lives. In 2021, we had two debt assumptions. The country’s domestic debt has grown from US$1.5billion in 2015 to US$3.5 billion in December 2021, which is not good enough as it is being caused by a scoundrel central bank,” he added.
Biti blamed RBZ governor John Mangudya for the country’s increase in debt assumptions as he claims it ballooned as a result of government’s purchases of weapons from outside states used against citizens.
Biti also urged that there is need for citizens to do something about the issue.
“ We must do something, if they are capable of repenting and doing something so radical as the country does not need a central bank, it need a currency board,” Biti argued.
He also said the Public Debt Management Act together with the Financial Act need complete overhaul on the issue of Debt Assumption.
Government has assumed a number of state-run firms’ debts amounting to billions of United States dollars despite warnings that it is cultivating a bad culture.
Some of these include ZISCO Steel’s US$500 million and RBZ’s US$1.4 billion debts. Accounting for the January 2022 assumption of RBZ debt, ZIMCODD said total public debt will expand to US$14, 2 billion.
The RBZ debt alone, totaling US$5, 4 billion now constitutes over 30% of total debt stock.
Debt assumption, according to ZIMCODD will have negative socio-economic effects on the ordinary people, as it translates to an extra financial burden on taxpayers.
