But the truth always comes out. A Chinese trading company, Shougang International, sued its bank, Standard Chartered, after the company’s FCA was cleaned out. The bank put the blame on RBZ, saying Shougang needed to claim its money from central bank, which was the one that had raided the account.
High Court judge Francis Bere ruled that Standard Chartered was indeed responsible for reimbursing its client. Years later, the raids were confirmed by Patrick Chinamasa, who as Finance Minister finally admitted to the heist.
So, will depositors now trust banks, and indeed central bank, not to loot these new FCAs as they did back then?
It could have been different, had the government been wiser with money and spent less. But they wanted the money. As Finance Minister Mthuli Ncube admits, the government has been spending too much.
The overdraft with the Central bank stands at $2.3 billion, as at end of August 2018, well above the statutory limit of $762.8 million. To stop this, Ncube will now limit the overdraft to the 20 percent of the previous year’s revenues, as is required by law. Ncube also says he will from now on curb the issuance of Treasury Bills, a big part of the currency crisis.
While TBs are used in some markets to fund infrastructure, the government of Zimbabwe has used it to feed its spending habits. It just wants the money.
Ncube’s latest moves may make sense. But the sense of loss among Zimbabweans cannot be healed by token steps not backed by real action. Public trust in the RBZ, and in government institutions as a whole, has totally collapsed.
At a meeting with businesses in Harare back in 2016, Emmerson Mnangagwa, then VP, admitted that central bank had a serious trust issue on its hands. However much RBZ explained the bond note, he said, the public just wasn’t buying it.
“The RBZ has been explaining and explaining and explaining, but the people have been doubting and doubting and doubting,” he said.
Ncube, Mangudya and Mnangagwa himself often talk about their concern for the budget and trade deficits. But by far the biggest deficit they need to sort out is the trust deficit. No tweaking of policy, or bailout, can fix that as long as the RBZ and the Government are not doing the right things.
Only when the public sees that RBZ is solving their problems, and not actually causing them, can that trust be restored. Speeches and wafer-thin “policy interventions” won’t cut it anymore.
For now, people believe the bank is robbing them blind, as it has done for years, simply because, like the great train robber Pierce, it simply wanted the money. Just to spend as it wishes, with no explanation.
At the end of The Great Train Robbery movie, Edward Pierce escapes from custody and gets away with the robbery. Just like our government today.- NewZWire.live
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