Chapfika raises questions about how much RBZ actually owes


The chairman of the Parliamentary Portfolio Committee on Finance and Economic Development David Chapfika says there are glaring anomalies on the amounts that the central bank reportedly owes to creditors with some more than 20 times the loan amount.

The central bank reportedly obtained a loan of US$1.7 million from FBC Afrexim bank but the outstanding amount is listed as US$43.7 million.

“ASP Marketing whose loan amount of US$25.8 million with interest pegged at one year Libor +2% has amount payable surprisingly listed as US$41.2 million. Amounts due to several FCA Corporates are US$70. 5 million yet the amount payable rose to an astronomical US$131. 88 million,” Chapfika said.

Chapfika was presenting his report on the Reserve Bank of Zimbabwe (Debt Assumption) Bill under which the government intends to take over the central bank debt of US$1.35 billion.

The Movement for Democratic Change is opposed to the move.

Chapfika’s committee, however, supported the bill because it would free the central bank to concentrate on its core activities.

A member of the committee, Priscilla Misihairabwi-Mushonga, objected to Chapfika’s statement that former central bank governor Gideon Gono might be charged with contempt of Parliament over his remarks to the media about the debt.

Gono told the media that the central bank could clear about $1 billion through the sale of its assets. It was also owed about US$1.4 billion by the government which was enough to pay its debts.


Full contribution:




First Order read: Adjourned debate on motion on the Second Reading of the Reserve Bank of Zimbabwe (Debt Assumption) Bill (H.B. 7, 2014).

Question again proposed.

MR. CHAPFIKA: Thank you Mr. Speaker. Mr. Speaker, I rise to give the Report of the Portfolio Committee on Finance and Economic Development on the Reserve Bank of Zimbabwe (Debt Assumption) Bill.


1.1 Mr. Speaker Sir, in his 2014 National Budget Statement presented to Parliament on 19 December 2013, the Minister of Finance and Economic Development announced Government’s intention to assume the Reserve Bank of Zimbabwe debt of US$ 1.35 billion. He indicated that a Bill that would give effect to this policy direction would be brought to Parliament and pursuant to that, the Reserve Bank of Zimbabwe (Debt Assumption) Bill was published in the Government Gazette on 6 July 2014. Hon Members would be aware that this Bill seeks mainly to provide for the settlement of liabilities incurred by the Central Bank on behalf of Government. The debt takeover is meant to relieve the Central Bank of the debt burden and enable it to concentrate on its core business. This report, therefore, highlights the Committee’s findings and recommendations on the Bill.


2.1 In coming up with this report, the Committee complied with Section 141(2) of the Constitution of Zimbabwe, which states the following:

“Parliament must ensure that interested parties are consulted about Bills being considered by Parliament, unless such consultation is inappropriate or impracticable.”

In addition to the above provision, the terms of reference for Portfolio Committees specify that:

“Portfolio Committees shall consider and deal with all Bills and Statutory Instruments or other matters which are referred to it by or under a resolution of the House or by the Speaker.”

2.2 In fulfillment of the above legal requirements, the Committee managed to conduct public hearings on the Bill on 15, 16, 17 and 18 September 2014 in Mutare, Bulawayo, Gweru and Harare respectively. Plans to conduct at least a hearing in each of the country’s provinces did not materialise owing to financial resource constraints. The Committee also met with the Minister of Finance and Economic Development and the Governor of the Reserve Bank of Zimbabwe before finalising this report.

2.3 The Committee extends its sincere appreciation to all the organisations such as the Zimbabwe Coalition on Debt and Development and Bankers Association of Zimbabwe and individuals who took time to attend the public hearings and made their oral submissions on the Bill. It also expresses gratitude to all stakeholders who made written submissions which the Committee considered seriously.


3.1 Public Awareness on the Bill

3.1.1 The Committee observed that the general public did not understand the modalities through which the Government intends to address the RBZ debt. As it stands, the public believes that Government will soon mobilise cash to pay off creditors, when in actual fact, the debts will be retired via the issuance of treasury bills with tenure of between 3 to 5 years since Government does not have cash at present. The Committee proposes that the Minister of Finance and Economic Development undertakes awareness campaigns to explain the use of treasury bills in paying off the debts.

3.2 Reserve Bank Quasi Fiscal Activities

3.2.1 Although the Committee acknowledged the role played by the Central Bank when it engaged in quasi fiscal activities, given the prevailing macro-economic environment, the public observed that in future, such level of expenditure must not be incurred without the approval of Parliament. However, we have observed with concern, recent media reports which appear to be attributable to the distinguished former Governor of the Reserve Bank of Zimbabwe, which appear to tarnish the integrity of Parliament, its Committees and myself as Chairperson of the Finance and Economic Development Committee. Should this be proved correct, the former Governor could be in contempt of Parliament.

3.2.2 In the same vein, whereas evidence received by the Committee from the public included calls that beneficiaries of the farm mechanization programme be made to pay for the machinery and equipment they received, the Committee’s position is that there be no payments by beneficiaries because the programme was noble as it anchored the land reform programme.

3.3 Validation of the debt

3.3.1 The Committee is concerned that the verification and validation process has not been completed at a time Parliament is considering the Bill. Both the Minister and the Governor of the Reserve Bank of Zimbabwe assured the Committee that the Zimbabwe Debt Management Office, in consultation with the Central Bank, are working on this process and a full audit would be carried out on the original capital sums contracted.

3.4 Anomalies on the Schedule

3.4.1 The Committee observed glaring anomalies in the schedule of the Bill with regards to the quantum of the capital sums and the interest rates applicable if any. For example, the FBC Afrexim-bank loan amount of US$ 1.7 million has an outstanding debt listed as US$ 43.7 million, ASP Marketing whose loan amount of US$25.8 million with interest pegged at one year Libor +2% has amount payable surprisingly listed as US$41.2 million. Amounts due to several FCA Corporates are US$70. 5 million yet the amount payable rose to an astronomical US$131. 88 million.

3.4.2 Debate on the Meikles Limited debt also took centre stage where Members queried the almost US$ 90 million amount due as quoted in the company’s published accounts. However, both the Minister and Governor gave a detailed explanation, to the satisfaction of the Committee, on how they have dealt with the amount of the debt. The Committee was informed by the Governor that positive negotiations with Meikles Limited are in progress which will result in a significant adjustment to the amount due. The Governor advised the Committee that his decision in arriving at a settlement figure will be influenced by the fact that the amount has been outstanding for a long period of almost seventeen years, thereby prejudicing the operations of Meikles Limited as a private entity.

3.4.3 On other anomalies raised on the schedule, the Minister assured the Committee that the Ministry of Finance and Economic Development would submit a revised schedule at committee stage, where amendments would be considered. Parliament and the Minister are at liberty to bring in amendments to be considered at this stage.

3.4.4 The Committee expressed concern that small creditors had not been included, the majority of which are indigenous businesses whose operations have been affected negatively and some have even collapsed as a result of monies owed to them by the RBZ. It is the Committee’s hope that the revised schedule would be comprehensive enough to capture some creditors such as Time Bank, which attended the public hearings and followed with a written appeal. The Governor, however, advised the Committee that the Central Bank is in discussion with Time Bank and is close to resolving the issue.

3.4.5 The Committee went further to seek clarity on the varied interest rates applicable to various creditors. The Governor advised the Committee that the Central Bank was negotiating with the creditors to reach amicable solutions on same.

3.5 Violation of in duplum Rule

3.5.1 The Committee observed with concern that some debts had violated the in duplum rule and the Minister promised to look into it with a view to addressing the concern.

3.6 Indebtedness to Individuals

3.6.1 The majority of the submissions were highly critical of the Bill in its current form for failing to address the position of individuals’ foreign currency accounts whose monies were transferred to RBZ by banks following a directive from the Central Bank. As such, members of the public viewed Government as prioritizing corporate creditors and ignoring ordinary people such as pensioners who lost their accumulated savings with insurance companies and those who lost funds when the RBZ unilaterally removed zeros, thereby further impoverishing innocent Zimbabweans.

3.7 Immunity of Banks

3.7.1 While Section 4 (4) of the Bill gives immunity to the RBZ, thus releasing it from all liability for all prior debts assumed by Government, the same status is not extended to the Commercial Banks who were acting at the time as agents of the Central Bank in the incurrence of debt liabilities. The Committee raised this matter and is pleased that the Minister agreed to extend the immunity to cover commercial banks.


4.1 The Committee, therefore, makes the following recommendations:

4.1.1 Any future debt must be contracted within the confines of the Constitution of Zimbabwe. Section 300 provides that an Act of Parliament must set limits on borrowings by the State, the public debt and debts and obligations whose payment is guaranteed by the State and those limits must not be exceeded without the authority of the National Assembly.

4.1.2 The process of validating and agreeing on the interest rates for the debts should be expedited so that it is completed within the shortest possible time.


5.1 In conclusion, the Committee supports this Bill because of the effect it will have on the functions of the Central Bank in carrying out its core business. The Committee, therefore, submits this report for approval of the Bill by the House subject to the Hon. Minister and the Governor of the Reserve Bank of Zimbabwe attending and addressing the issues raised therein.

DR. KEREKE: Thank you Mr. Speaker Sir. I rise to lend support to our hon. member, the Committee Chairperson, who presented the report as a summary of the Committee’s findings. Mr. Speaker Sir, I think the country is aware of the difficult…

MRS. MISIHAIRABWI–MUSHONGA: On a point of order Mr. Speaker Sir. I just want clarification, if a report is being presented as a report of the Committee and it includes some things which were not resolved by the Committee, what should we do? This is because there are things that the Chairperson speaks about which were not resolved in the Committee.

MR. SPEAKER: Before the Report was brought to this august House, can you confirm or deny that the Report was read in Committee and adopted paragraph by paragraph or you were not privy to that exercise?

MRS. MISIHAIRABWI–MUSHONGA: No, Mr. Speaker Sir, we did not go paragraph by paragraph because what happened is that, it was not the problem of the Chairman of the Committee because we needed to come and give this report immediately after the Governor and the Minister came. We then agreed that the Chairperson and the Secretary for the Committee would find a way of putting in specific talking points. The majority of those talking points are there. I think I should just raise the issue and I have asked some of our colleagues who were in there, to say perhaps I missed that point. We never spoke about the issues around the former Governor’s statement. If that is an issue, it is an issue about the Chairperson, Hon. Chapfika in his personal capacity and Hon. Kereke. Certainly, that issue was not debated in Committee.

MR. SPEAKER: Hon. Misihairabwi – Mushonga, can you confirm that there were two drafts of the Report?


MR. SPEAKER: In terms of Standing Rules and Orders 206, if you have two drafts, then you will have someone move a motion for the adoption of either of the two drafts – was that done?

MRS. MISIHAIRABWI–MUSHONGA: It was not done. As I explained to you Mr. Speaker…

MR. SPEAKER: Wait a minute. It was not done?


MR. SPEAKER: Did you raise any objection?

MRS. MISIHAIRABWI–MUSHONGA: No, I did not and that is why I was explaining that because we knew we were late and the Minister was going to come to the House, we then gave authority to the Chairperson to say here are the talking points, include them in the original report and it is those talking points that I am referring to, that none of those talking points, included some of the things that he put in the report.

MR. SPEAKER: They have been excluded?

MRS. MISIHAIRABWI-MUSHONGA: No, that he has included things that were not part of the talking points.

MR. SPEAKER: Order hon. members. I would want to read – order, Hon. Mawere there – presentation of reports must totally comply with the Standing Rules and Orders. In this case, I will read and make a decision. I refer here to Standing Order No. 206, “206.(1) When the committee has concluded its deliberations and agreement has been reached in principle, a draft report shall be prepared by the Chairperson or by some other member of the committee if the Chairperson is not in agreement with the majority opinion. The draft report shall be presented for consideration to the committee and also any other draft report prepared by any other member of the committee which he or she may wish to submit for consideration. If more than one draft report is submitted the fact shall be recorded in the minutes of proceedings and a motion shall then be moved that one of them be selected for consideration by the committee. The draft report so selected shall then be considered paragraph by paragraph by the committee in the same manner as a bill in the committee stage and amendments may be moved to each paragraph”.

Further, “(2) During the consideration of a draft report the committee may, by resolution, amend any part thereof or any paragraph which has previously been agreed to; and may, at any time during the consideration of a draft report or at any time thereafter during the proceedings of the committee on the report, rescind any resolution made in connection therewith.

(3) When consideration of the draft report has been concluded the Chairperson shall propose the question” and what is the question, ““That the report (or the report as amended) be the report of the committee”. If this question is negative another report may be brought up, considered and agreed to by the committee.

After the question “that the report be the report of the committee” has been decided in the affirmative, the question shall be put in the case of a report on a bill or statutory instrument “That the Chairperson (or a member of the committee designated by the committee) do present the report to the House”, and in the case of a report on a draft bill or draft statutory instrument “That the report be transmitted to the Minister or authority on whose behalf the draft bill or draft statutory instrument was referred to by the committee”.

Now, from what Hon. Misihairabwi-Mushonga has stated, there was an agreement that there will be talking points included in the report. Is that correct hon. Chairperson?

MR. CHAPFIKA: Mr. Speaker, we are not aware of two reports that were submitted. There was only one report that was considered by the committee. So I would want to say …

MR. SPEAKER: Hon. member, you are not answering my question. Was there an agreed position that these are the points and proceed to draft the report?

MR. CHAPFIKA: Yes, there was consensus. We were agreed …

MR. SPEAKER: On the talking points?

MR. CHAPFIKA: Yes and then on the report, we had prepared the report but because the Governor of Reserve Bank, Dr. Mangundya and the Minister of Finance and Economic Development had not come, so when they came, we then took into account their presentations which we added into the original report. May be that was the problem but we had just wanted to include the observations of the Minister and we were going to submit the report the same afternoon. There was only one report and we included the talking points, and the Chairman and the Clerk were asked to finalise and submit.

MR. SPEAKER: After the submissions by the Governor and the hon. Minister, was the draft report then taken back to the committee?

MR. CHAPFIKA: Well, we sat …

MR. SPEAKER: Please answer my question. After putting what had been submitted by the hon. Minister …

MR. CHAPFIKA: Mr. Speaker, hear me well please. With all due respect, the intention was to submit the report that afternoon. We considered as a Committee, we finished it. It was just writing but we considered the report and made resolutions as a Committee in total. There are other members here that could second what I am saying that it is the correct position. It was considered but unfortunately, it was done the same day because we had three meetings on the same day.

MR. SPEAKER: Hon. Chair, can you help me. When you got submissions from the hon. Governor and the hon. Minister, you included those submissions into your draft report.


MR. SPEAKER: Was that taken back to the committee for adoption?

MR. CHAPFIKA: That was not Mr. Speaker Sir, that was not the position. We discussed the Report and then we were finalizing it. The Committee made a resolution Mr. Speaker Sir.

MR. SPEAKER: To authenticate the credibility of the Report, particularly after the latter submission by the Reserve Bank Governor and the hon. Minister of Finance, procedurally those additions should have been incorporated in the draft report and then taken back to the Committee for affirmation – that was not done.

MR. CHAPFIKA: It was done.

MR SPEAKER: Was it done?

MR. CHAPFIKA: Mr. Speaker Sir, Hon. Misihairabwi-Mushonga is not disputing all that.

MR. SPEAKER: I do not want to make a discussion, was it done?

MR. CHAPFIKA: It was done.

MR. SPEAKER: Therefore, I rule that the Report is genuine. Thank you.


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Charles Rukuni
The Insider is a political and business bulletin about Zimbabwe, edited by Charles Rukuni. Founded in 1990, it was a printed 12-page subscription only newsletter until 2003 when Zimbabwe's hyper-inflation made it impossible to continue printing.


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