Govt securitises US$600m RBZ debt


Reserve Bank of Zimbabwe building

GOVERNMENT has securitised the Reserve Bank of Zimbabwe (RBZ) debt amounting to US$603,8 million.
The securitisation of part of that debt means that government has taken over assets underlying that debt, which is now secured.
It can now begin repayment of the RBZ debt through issuance of debt instruments such as Treasury Bills to banks and other creditors.
Finance Minister Patrick Chinamasa disclosed: “In line with the road map for capitalisation of the RBZ announced in the 2014 Budget, Treasury has to date securitised Reserve Bank of Zimbabwe debt amounting to US$603,8 million as part of the debt takeover by government.”
Government recently took over a US$1,3 billion debt from the central bank under the Reserve Bank Debt Assumption Act, which was recently signed by President Robert Mugabe.
The Act was put in place to authorise government to take over the debt, whose repayment is now essentially the responsibility of the State.


Finance Minister Patrick Chinamasa

The Act came into law after sailing through the National Assembly, despite protests by MDC-T legislators.
The debate surrounding the Reserve Bank Debt Assumption Bill had been so heated that the Speaker of the National Assembly, Jacob Mudenda, had to divide the House to determine the way forward.
While MDC-T legislators tried to block passage of the Bill, ZANU-PF policymakers outnumbered the MDC lawmakers.
The Bill then passed after 115 ZANU-PF legislators in the House voted for its passage against 37 Members of Parliament from the MDC-T who opposed it.
MDC-T Parliamentarians had said government, instead of taking over the debt, should force farmers who received farm machinery to pay and that an audit should be carried out to determine how the US$1,35 billion was incurred.
But ZANU-PF MP and chairman for the Budget and Finance Committee, David Chapfika, said although ordinary people wanted those who benefited from a farming scheme which contributed to the debt to pay, it would be wrong as the activities of the central bank acted on behalf of the State.