A PARLIAMENTARY select committee hearing was abandoned Tuesday after a heated clash between central bank governor, Gideon Gono, and Zanu PF Goromonzi North MP, Paddy Zhanda, with the legislator storming out of the meeting.
The Portfolio Committee on Agriculture was discussing the US$200 million agricultural mechanisation programme financed by the RBZ which critics say helped stoke the central bank’s US$1.5 billion debt after beneficiaries failed to pay for the equipment.
The RBZ also ended up being sued by private companies which supplied the equipment after failing to pay them.
But tempers flared Tuesday after Gono refused a request by Zhanda, a top Harare businessman and former bank executive, to reveal the names of the beneficiaries of the programme.
“Section 60 (1) of the RBZ Act [Chapter 22:15] forbids bank staff from disclosing information relating to the affairs of the bank or a customer unless lawfully required to do so by any court or under any enactment,” Gono said.
“Anybody who contravenes the section shall be guilty of an offence and liable to a fine not exceeding level seven or imprisonment for a period not exceeding two years or to both such fine and such imprisonment.”
Zhanda countered that select committee hearings were protected under the privileges of Parliament, triggering a heated argument with Gono.
Mhondoro Ngezi legislator Bright Matonga tried to calm the frayed tempers by suggesting Zhanda allow Gono time to bring the information to Parliament.
“I think we did not tell Dr Gono about all the information we wanted from him, so we should allow him time to get the information before we continue with the hearing. The information, like he is saying, belongs to the Ministry of Agriculture, Mechanisation and Irrigation Development and has to be cleared first to release it,” Matonga said.
“This meeting is not supposed to be a platform for the settlement of grudges, but the discussion of important national issues.”
But Zhanda, clearly unimpressed, stormed out of the hearing forcing committee chairperson, Moses Jiri, to call-off the meeting.
Relations between Gono and Zhanda have been frosty since the RBZ chief, last year, claimed that the legislator had sought bribes from him promising to abandon a Parliamentary investigation into the central bank's activities in return.
Meanwhile, Gono had earlier revealed that machinery worth US$200 million was distributed to farmers under the programme which was expected to run for five years, but had only been rolled out for two years between 2007 and 2008. The implements included tractors, combine harvesters, harrows, knapsack sprayers and planters.
“We distributed the machinery with the assistance of the Ministry of Agriculture, Mechanisation and Irrigation Development and the Grain Marketing Board,” he said.
“Beneficiaries received implements according to the sizes of their land and the ecological regions in which they are operating.
“The GMB and the Ministry identified the beneficiaries. They were the ones who had information on the farmers and their production records.”
The RBZ chief denied it was the responsibility of the central bank to ensure that farmers paid for the equipment saying the Ministries of Finance and Agriculture had to make the necessary follow-ups. He said the Reserve Bank was did not have the capacity to do the follow-ups with a staff of 500.
Gono refuses to take sole responsible for the central bank’s debt problems and seethes at criticism of his quasi-fiscal activities over the last decade insisting most of the programmes were carried out at the express direction of Cabinet through successive finance ministers.
“So distorted are the facts behind the bank’s debt profile that in some quarters the belief is that RBZ and my management team spent US$1.1 billion either buying tractors and scotch-carts (mechanisation programme) or simply went on a debt contracting spree and blew away the money in support of non-existent programmes or at the worst, (that) the whole amount is a Gono debt which he must find a way to repay,” Gono charged in a statement last year.
“The discussion of RBZ debtors has only centred around Farm Mechanisation debtors who owe RBZ about US$198,0 million which is 12,4 per cent of RBZ’s debtors, while ignoring 87,6 per cent of the debts owed to the bank by Government.
“If government was to repay RBZ US$1,4 billion that it owes the apex bank tomorrow, the bank would in turn be able to pay its US$1,1 billion debt to creditors and still remain with US$300 million for its capitalisation, lender of last resort operations, day-to-day needs and then focus on its core mandate!”