BY VENERANDA LANGA
Parliament yesterday slammed the Reserve Bank of Zimbabwe (RBZ) for carrying out quasi fiscal activities outside its mandate and using taxpayers and pensioners’ money to fund government activities.
RBZ deputy governor Khuphukile Mlambo was yesterday at pains to explain before Parliament how the central bank issued US$2,7 billion through unallocated reserves as well as US$663,8 million Treasury Bills (TBs) in 2017 and 2018 to President Emmerson Mnangagwa’s ally, Kudakwashe Tagwirei of Sakunda Holdings for Command Agriculture.
The Tendai Biti-led Public Accounts Committee (Pac) also said in addition to the US$429,9m which the RBZ issued to Sakunda in 2017 as TBs, by December 2017 an unexplained US$1,37 billion was also issued out as an overdraft facility without seeking Parliament’s approval.
Pac said RBZ was an irresponsible government adviser who took instruction from the Finance ministry to issue $663,8m TBs to Sakunda – a fuel dealer – for Command Agriculture without following up on the kind of agricultural inputs and seeds that were then supplied by Sakunda.
“The RBZ does not originate TBs and the information I have is that the instruction came from the Finance ministry to issue those TBs and the only TBs issued by ourselves were to Sakunda for Command Agriculture amounted to US$429,9m in 2017, and in 2018 we issued US$231m and the whole total was about $663,8m issued by 2018. This was through an instruction by the Finance ministry who said Sakunda was financing the Command Agriculture programme,” Mlambo said.
Asked whether the RBZ checked whether Tagwirei supplied the inputs for Command Agriculture, Mlambo replied: “If your government says pay so that things are supplied, I believe they were supplied. We were paying TBs as per instruction by the Finance ministry. To my understanding, in 2018 there were large deliveries of grain because command worked.”
Biti added: “So you pay oblivious of whether a service is provided for. This is terribly irresponsible and in addition it is unconstitutional.”
The committee said the actions by the central bank resulted in increased money supply and movement in the exchange rate which has shot up. The committee described it as “rogue” payments by the RBZ, adding that the RBZ was at the epicentre of issuing TBs on behalf of government – of money that they did not have, and when they mopped people’s accounts to pay it.
Dzivarasekwa MP Edwin Mushoriwa (MDC Alliance) said the US$663m paid to Tagwirei was money from pension companies, adding that the RBZ was damaging the savings culture in the country.
“Savings were affected by currency reforms and whenever there are currency reforms people do get affected. I am in my eighth year at the RBZ and my salary has also not changed and worse it is now in local dollars and was also hit by currency reforms,” Mlambo said.
Asked to explain the discrepancies in amount released to Sakunda from Treasury and the RBZ document, Mlambo said the difference might be accounted for because other payments made to Sakunda were through the Presidential Input Scheme. He said some of the money was also paid to the Grain Marketing Board for grain imports.
The Treasury document showed that in 2017 they paid Sakunda US$378,7m and yet the RBZ statement said Sakunda was paid US$429,9m in 2017 – a difference of about US$100m.
Biti then asked him about other payments made in 2017 saying: “In 2017, government overshot by US$2,9 billion paid from unallocated reserves without Parliament approval. It means that in 2017 you supported agriculture by more than US$2 billion and we can actually import twice the maize than we are farming.”
Mlambo was asked to bring all documents detailing how government ordered the payments, and who was paid.
The RBZ officials told the committee that all TBs issued before promulgation of SI 142 2019 will be paid at 1:1 rate. Mlambo failed to explain the US$2,9 billion payment made in 2017.
Mlambo was also asked to bring before Parliament names, amounts and securities provided by defaulters who contributed to the US$1,13 billion Zimbabwe Asset Management Company debt which is burdening taxpayers.