THE Reserve Bank of Zimbabwe’s US$1.2 billion debt includes some US$222 million owed to the West African country of Equatorial Guinea and millions more in funds looted from the accounts of local banks and other corporate bodies, it has been established.

The cash-strapped bank – which recently announced plans to sack some 1600 employees – is battling to raise funds to pay-off the massive debts which were incurred during its free spending days in the last decade.

Some of the major creditors include Equatorial Guinea which, the central bank says, helped with fuel supplies.

Zimbabwe procured some petroleum products from the West African country after helping nip in the bud an alleged coup plot against the country’s leadership.

The state-run Herald newspaper also reports that the RBZ looted some US$83 million from the statutory reserves of local banks, US$80 million from mining firms and other exporters as well as US$20 million from the accounts of non-governmental organisations.

In addition, the central banks of South Africa and Malawi are owed US$10 million and US$20 million respectively for loans the RBZ says were used on "critical national programmes".

Again, the US$184 million used to settle Zimbabwe’s arrears with the International Monetary Fund (IMF) also needs to be repaid.

RBZ boss, Gideon Gono, insists the funds were used to mitigate the effects of sanctions imposed by the West adding that without his intervention the country’s economy would have tanked-up.

The government is expected to assume part of the US$1.2 billion debt burden with the central bank paying-off the balance.

Officials insist a thorough audit must however, be carried out to establish how the liabilities were incurred.

The RBZ’s debt -- which at one point resulted in some of its assets being auctioned -- has been a source friction between the bank and Finance Ministry officials.

The treasury has been reluctant to assume the bank’s obligations arguing its indiscriminate spending on so-called quasi-fiscal operations were a complete failure and only helped stock-up world-record inflation over the last few years.