By A Correspondent- The government is set to inherit an unspecified Reserve Bank of Zimbabwe (RBZ) debt, a move that will make the central bank debt-free for the first time in two decades.
A similar move in 2013, however, attracted criticism from members of the public who argued that the government’s takeover of the US$1.35 billion RBZ debt would exert pressure on taxpayers who bear the brunt of paying off debts they did not know how they were accrued.
Business Weekly reports that the move will capacitate the bank and pave way for investment by both local and foreign investors.
This debt takeover is also premised at improving the ability of the central bank to engage in fruitful commercial relationships, including the bank’s ability to mobilise significant external lines of credit needed by the country.
Sources who spoke to Business Weekly said:
Some of the debts go back 20 years ago. The Reserve Bank of Zimbabwe has completed consolidation of the debt and it will be transferred to the Ministry of Finance and Economic Development.
The process of transfer to the Ministry has started and the Ministry is now in the process of verification, once completed, the debt will be transferred and consolidated into national debt
Lines of credit have been dwindling since two decades ago as creditors became reluctant to lend the debt-ridden Southern African country.
Zimbabwe has about US$9.8 billion as domestic debt, while the foreign debt still stands around US$8,1 billion, with 70 percent of these liabilities being arrears.
The incumbent government has since 2017 been pursuing multilateral partners in its efforts to clear outstanding external debt to reopen access to concessional lending from global lenders and reestablish ties with global partners.
Upon transfer, the RBZ debt presumed to be billions of Zimbabwe Dollars will be evaluated by Treasury to ascertain whether the financial liabilities were contracted for or on behalf of the Government.
Recently, the World Bank commended Zimbabwe for its transparency on debt reporting but expressed concern that the Southern African country continues to be in debt distress.-eBusinessWeekly