BULAWAYO residents yesterday appealed to the government not to take over the controversial $1,35 billion Reserve Bank of Zimbabwe (RBZ) debt saying the central bank was reckless in its spending and should pay for its extravagance. NQOBILE BHEBHE CHIEF REPORTER
Residents said the government should instead speedily write off debts of closed and struggling city firms as that would lead to industrial revival.
Contributing to public hearings on the Debt Assumption Bill conducted by the Parliamentary Portfolio Committee on Finance and Budget at the Small City Hall in Bulawayo, stakeholders said if the government took over the RBZ’s staggering debt that would add more misery to Zimbabweans through extra taxation.
In June, draft legislation to take over RBZ’s $1,35 billion debt was gazetted.
The Bill is under consideration by the Parliamentary Legal Committee.
The Bill seeks to provide settlement of certain liabilities incurred by the central bank. In terms of the Bill, the State would assume debts incurred by the RBZ before December 31 2008.
Stakeholders raised concern that the Bill sought to prioritise the clearing of corporate debts while ignoring ordinary citizens who lost their life savings when some financial institutions folded.
Zimbabwe Congress of Trade Unions (ZCTU) western region regional officer Percy Mcijo said RBZ should pay up.
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“RBZ should pay up the debt and not the whole nation. Why should ordinary Zimbabweans pay for something that they did not benefit from?” he said.
Nokuthula Zondo of ZCTU said Bulawayo should not be part of the debt take-over.
“As Bulawayo, we have suffered a lot and we say no to the government taking over the debt. It is us who will again be expected to foot the bill through taxes,” she said.
“Pensioners are suffering as their funds were wiped out overnight in their accounts and RBZ is responsible.
“We wonder if it’s the right time for the government which has its own debt to further burden itself with the RBZ debt. RBZ should never be allowed to carelessly expose the country to debt.”
Prosper Chikomo said the central bank embarked on an extravagant borrowing spree and it was not clear how the funds were used.
“The government should ignore RBZ debt and instead assume the debt of closed firms here in Bulawayo. Belmont industrial area is now in a sorry state,” said Chikomo.
“We would rather have that money is channelled towards closed industries in Bulawayo than on sponsoring RBZ extravagancies which never benefited Bulawayo. Will the government’s intended action help revive industries in Bulawayo?”
Committee chairperson David Chapfika, who is the legislator for Mutoko South, said the central bank found itself having to dip into quasi-fiscal operations to raise funds for various social activities.
Asked if the government would compensate ordinary Zimbabweans that lost their cash during dollarisation switch over, Chapfika said it was a “mammoth task”.
“I have had discussions with the Finance minister (Patrick Chinamasa) and he said a consultative process on the Zimbabwe dollar will be carried out. “It’s true that people lost their bearers cheques, but that’s a mammoth task to compensate people,” he said.
Critics blame the massive debt on former RBZ chief Gideon Gono’s so-called quasi-fiscal operations which saw the bank print money to fund various activities, including elections, acquisition of farm implements and luxury vehicles for government officials, during the hyperinflation era.
Chapfika did not rule out tax payers bearing the burden of paying for the debt accrued during the hyperinflationary era.
“The government does not run a business and the only source of income for the government is through taxes,” he said.
The hearings move to Gweru today with the last one being in Harare tomorrow.
