Published by the government of Zimbabwe
Regis Chitanda
3 November 2009
opinion
Harare — AS an equally interested member of the public, I have felt a deep compulsion to speak out and raise pertinent points on the proposed amendments to the RBZ Act.
Overally, the Amendment Bill comes across as an attempt by the Minister of Finance, Tendai Biti, to make the Reserve Bank ineffective in contributing to the turnaround of the economy.
When one looks at the new clauses Minister Biti is proposing to introduce, he is seeking to give himself sweeping powers that are unprecedented in all the statutes in Zimbabwe governing the relationship between Government ministers and parastatals or State institutions.
Equally fundamental, the powers the minister is giving himself far exceed international best practice as articulated in the Sadc Model Central Bank Law.
In the interest of objectivity and balanced discourse, it is essential that I take the readers through some of the clauses Minister Biti wants to introduce.
Takeover of RBZ assets
Under Clause 19 of the Bill, Minister Biti seeks to have Government take over assets owned by the RBZ, including shares and RBZ investments in the private sector.
This provision is unconstitutional in that it violates the rights of association of the other shareholders who went into business with the RBZ in the first instance who must now put up with new shareholders in the form of Government, regardless of their pre-emptive rights and preferences.
What is also callous and intriguing about the asset takeover provision is that Minister Biti is failing to realise that the RBZ as a separate legal persona holds liabilities in the form of banks' deposits and other creditors on the back of which the assets now being targeted were funded.
Government cannot, therefore, simply take over the RBZ assets without compensation. Doing so would clearly fly in the face of current attempts to convince the world that in Zimbabwe, no asset legally held by another entity shall be expropriated by the State.
If for some strange reason our legislature passes this Bill, the immediate result would be to foist the RBZ into insolvency, which again would run contrary to the efforts meant to stabilise the macroeconomic situation in the country.
Clause 5 of the Bill prohibits the RBZ from lending money to the State "unless the money is denominated in Zimbabwe currency". Given that it is common cause that Zimbabwe is not trading in Zimbabwe dollars, Clause 5 is, therefore, creating a dysfunctional entity in relation to advancing the policies of Government.
Clause 5 (5) requires that even when the RBZ provides overnight and intra-day liquidity support to banks, it does so only with express authority from the Minister of Finance. In practice, such a policy would yield catastrophe in the payments system, as bureaucracy takes its toll. Banks typically require swift turnaround, particularly in relation to RTGS intra-day facilities and overnight liquidity assistance.
Lending to RBZ employees
Under Clause 11, Minister Biti is proposing to outlaw the RBZ giving loans to RBZ staff without the minister's approval. Such a law would mean that even when an RBZ staff member falls sick and wants, say, a bridging medical loan of US$10 to buy tablets, then permission will have to be sought through the minister. Honestly, this would be absurd, to say the least. Also, the minister is failing to realise that already there are employer-employee obligations that were contractually entered into which cannot simply be violated in compliance with the proposed highly personalised and vindictive Bill.
Micro-management
Under Clause 11 (5) Minister Biti proposed that the RBZ Board meets monthly and that all board minutes be sent to the minister two weeks after the meeting. Firstly, such a requirement is impossible since the minutes can only be official minutes if confirmed by the board.
The position in the Bill, thus, causes draft minutes to be sent to the minister before the board would have approved them within 14 days.
Indeed, the minister is trying to micro-manage the RBZ. Equally true, he seems to be intent on intimidating board members by having monthly access to intricate details of the board's meetings.
RBZ oversight committee
The Bill also proposes that there be an Oversight Committee to be chaired by the Permanent Secretary for Finance. In effect, this would render the RBZ a mere sub-unit in the Ministry of Finance which is directly contrary to best practice when autonomy of the central bank is key to successful monetary policy formulation and execution.
Clause 18 of the Bill seeks to amend Section 62 of the RBZ Act to the effect that if the minister issues a directive, the RBZ Board should act accordingly, but the Bill does not give the nature of such directives. This clause gives the minister disproportionately wide powers which can be abused to reverse many of the developmental programmes the RBZ did such as the Farm Mechanisation Programme, the Agricultural Sector Productivity Enhancement Facility, Bacossi, the motor vehicle schemes and many others. Our parliamentarians must stand guard that they allow one individual to cunningly change the rules of the land for selfish reasons that bear no benefit to the nation at large.
The vindictiveness of the clauses in the Bill exudes stark desperation on the Minister of Finance to want to "fix" Dr Gono and his RBZ team. The Bill goes so far as to bar the RBZ Governor from travelling out of the country to represent the country's interests in international organisations unless expressly authorised by the minister.
The letter and spirit of this is that Dr Gono would not be allowed to contribute during professional discussions regionally and internationally if the Minister of Finance has not given the green light for the governor to open his mouth. Certainly it will be such a tragedy to the country's legislative system if this Bill was to be allowed to pass.
Laws must be crafted to benefit current and future generations as opposed to being cast as the toolkit of "fixing" personalities.
I call upon Honourable Members of Parliament to rise above party politicking and apply the principles of objectivity in deliberating the merits and demerits of the Bill.
In its present form, the Bill falls far too short to even merit debate. It is hoped, therefore, that our parliamentarians will make Minister Biti realise how important it is for Zimbabweans to work together in a more progressive way than to be spending productive time laying booby traps for each other.
The proposals in the Bill raise grave concern.
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