Bikita West legislator Munyaradzi Kereke, the former advisor to central bank governor Gideon Gono, said all the loans that the Reserve Bank of Zimbabwe borrowed were authorised by the Treasury. Gono, therefore, did a sterling job in discharging his mandate to superintend over the financial affairs of the country.
Gono and Kereke have been involved in legal wrangles since they parted ways but Kereke told Parliament during the second reading of the Reserve Bank of Zimbabwe (Debt Assumption) Bill that sometimes people should situate and interpret things in the right context.
“I also need to clarify to the House that, for all the loans which the RBZ borrowed over the years, and this is supported by facts Mr. Speaker Sir, that Treasury would issue letters of authority each year. Those letters are a matter of public record and they are there.
“It therefore follows that the Central Bank was acting as an agent of the State and the Bill as presented, is noble to the extent that it seeks to regularise the position where the principal contractor of the debt has to take charge of his debt,” Kereke said.
The government has proposed the bill so that it can take over the US$1.3 billion debt incurred by the central bank and allow it toc0ncentrate on its core business.
Members of the Movement for Democratic Change are opposed to the bill.
Full debate:
DR. KEREKE: Thank you Mr. Speaker Sir. To confirm that, I rise to support the Chairperson, I want to recognize that as a country, we went through a very difficult patch between 2007, 2008 and part of 2009, whereupon our country Mr. Speaker Sir, was under the yoke of the illegitimate and very illegal sanctions which meant that as a country – I recall at one point, a vivid situation that the country’s exports would be turned just as the ships attempted to dock because of sanctions.
The overall effect Mr. Speaker Sir, of those experiences was that our exports were constricted. We had no capacity over the course of that period to pay our way for inputs, pay our way in order to refund external debts which the country had incurred. Mr. Speaker Sir, the laws of the country as passed by the legislature under Section 8 of the Reserve Bank of Zimbabwe Act, it gave authority to the Central Bank to do and act as directed by the State when it is in the interest of the State.
Mr. Speaker Sir, I rise to amplify the sentiments that were echoed by the Central Bank Governor and the Hon. Minister of Finance when they presented to the Committee, that the quasi fiscal operations of the Central Bank played a very pivotal role in getting us to where we are. So, as a people we need to know. We got to a stage in our country where there was no single bag of fertilizer in the shops, countrywide you could drive for miles and miles and find all shops empty. At that particular moment, there were specific statutes that were passed to almost strangulate the economy of Zimbabwe – ZIDERA is one of them, which law Mr. Speaker Sir, specifically said, for institutions like the IMF, the World Bank and their related sister organisations were barred from giving loans to Zimbabwe.
Mr. Speaker Sir, most countries that we see getting debt concessions – they get concessions because when the IMF and the World Bank were formed in Bretton Woods 1945, it was to give a fair play to all member countries, where if you are a member country; you are in financial distress, they are supposed to give you loans.
MR. MARIDADI: On a point of order! The hon. member who is debating has every right to debate but I think as the advisor of the former Central Bank which engaged in quasi fiscal activities, I think it is in bad taste that he should rise and glorify quasi fiscal operations. He is on the field of play – [HON. MEMBERS: Inaudible interjections.]-
MR. SPEAKER: Order, order, order! You do not want to listen to my order? Hon member in a white jersey, white in complexion like me, if the Chair is trying to reply to a point of order, can you give us your ear please.
There is nothing in the Standing Rules which says a Member of Parliament cannot debate an issue even where that member might have been engaged, the same with the Ministers; if they are involved in a policy implementation issue and they are asked here in Parliament to give explanations, they have to do so and they cannot recuse themselves. So, if there are issues that Hon. Dr. Kereke will present to the Hon. House here, you are free then to contest that in reply. Thank you.
DR. KEREKE: Mr. Speaker Sir, in order to …
MR. MAONDERA: On a point of order Mr. Speaker Sir. An hon. member from the other side is giving us a torrid time. He is prodding us all the time and we are unable to listen to the debate properly.
MR. SPEAKER: Is the hon. member saying he is in the wrong place or he is disturbing the peace.
MR. MAONDERA: We are failing to listen to the debate properly as he keeps prodding us all the time and we are having a torrid time.
MR. SPEAKER: I thought you would be happy in case he is deciding to join the other side – [Laughter.] –
DR. KEREKE: I just gave that illustration to amplify the precarious situation our country had glided into against the background of sanctions. It became necessary therefore that the State, acting through Treasury invoked specific legislation, which was Section 8 of the Reserve Bank Act.
I also need to clarify to the House that, for all the loans which the RBZ borrowed over the years, and this is supported by facts Mr. Speaker Sir, that Treasury would issue letters of authority each year. Those letters are a matter of public record and they are there. It therefore follows that the Central Bank was acting as an agent of the State and the Bill as presented, is noble to the extent that it seeks to regularise the position where the principal contractor of the debt has to take charge of his debt. So, in terms of adoption of the Bill, we resoundingly, in the Committee concurred that this is a noble Bill to be adopted by Government. We considered in the Committee, written evidence which proved beyond any reasonable doubt, that Treasury was in fact giving instructions and authority to the Central Bank to incur those debts. We also looked through the Act, which confirmed that indeed Section 8 of the Central Bank, allowed the RBZ to act whenever asked to do so by the State.
Having said that, what we have now is the need for the House to look at doing the right thing the right way. In other words, I cannot foresee any dispute over the fact that when the Central Bank paid for importation of electricity, medicines, fertilizers from Omnia South Africa and grain, that there will be any shred of doubt that those payments are in the purview of Treasury. I cannot anticipate any dispute on that.
Where there is need now, for meticulous caution and care, is for the House to just ensure that the right things are done the right way. It is for this reason that, as a Committee, we unanimously concurred, Hon. Misihairabwi-Mushonga included, that we come and present through the Chair, recommendations for adoption and reading of the Bill for a second time. That was after having agreed that there could have been transcription errors. I want to believe Mr. Speaker Sir, there can be no doubt that it is an error for a loan recorded at US$1.7 million in 2008, then to be recorded as US$43 million. It is clearly an error and a point for correction. In the case of Meikles, for instance, the discussions were quite healthy with the Hon. Governor and the Hon. Minister, who concurred with observations in the Committee that US$90 million, as claimed by Meikles was excessive. The Governor then briefed the Committee on the inroads made in negotiating the figure down. We commend the Governor and the Hon. Minister for that sterling job because they saved the taxpayer an unwarranted burden.
I also want to take this opportunity to thank the former Governor of the Central bank, Dr. Gideon Gono, for the sterling job that he did in discharging his mandate to superintend over the financial affairs of the country. We want to say that sometimes, we should situate and interpret things in the right context. The RBZ Bill is noble and it is our wish that through the deliberations of the august House, it be passed into law, no day longer than is necessary. We have been promised by the Hon. Minister of Finance that he will take note and attend to the areas of concern, which in our view are more methodical technical issues in the compilation of the actual schedule so that inadvertently, we do not overburden or shortchange legitimate creditors who have been excluded. We were told that, as recent as last week, there were genuine cases that were being presented to the Hon. Minister of Finance and Economic Development and the Central Bank Governor, where some small creditors were left out.
Under the support to farmers, the Central Bank at that time would withhold some funds that belonged to tobacco farmers. It is quite possible that some farmers could have been left out in the schedule and it is for that reason that we politely ask the Hon. Minister and Hon. Governor to go and perfect that schedule.
On the whole, we would want to say that the glaring areas of concern, one of which was the fact that whilst the House is still deliberating to approve, some creditors are already ululating having been paid. We pointed out that perhaps it was irregular and that point was taken note of. We believe that the necessary corrections are being done. I thank you Mr. Speaker Sir.
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