By Costa Nkomo
FORMER Finance Minister Tendai Biti has admitted to undercutting the Reserve Bank of Zimbabwe during his time in charge of the national purse.
Biti was Treasury boss between 2009 and 2013 when a Government of National Unity (GNU) was consummated by political foes, former President Robert Mugabe and MDC founding president, the late Morgan Tsvangirai.
Speaking at a panel discussion organised by the Southern African Political and Economic Series (Sapes) Trust Thursday, Biti argued the RBZ has been at the centre of distortions in the economy for the past two decades.
“If you look at the Zimbabwean crisis in the last 20 years, the Central Bank has been at the epicentre of the distortions. Some of you might not know that during the GNU we didn’t have the central bank. Yes, it was there at number 180 Samora Machel (RBZ building) but in reality was not operational.
“Government accounts were kept at the CBZ who treated us like a commercial client. So, I couldn’t run an overdraft facility because John Mangudya (now RBZ Governor) would say ‘Minister you can’t do that’,” said Biti.
“Government accounts were only moved to Central Bank in April of 2014, but we survived, and we ran the economy well. The figures speak for themselves.”
Biti argued that the RBZ’s major functions such as bank licensing and supervision of financial players as well as managing the exchange rate should be privatised.
“The key functions of the central bank are the following; managing the exchange rate but we all agree in this room that we actually don’t need our own currency. So that’s key function number one gone.
“Key function number two is supervising the banking system. But why should the licensing authority also be the supervising authority? So, we need to take away bank supervision away from the central bank,” Biti said.
“In other countries, they have got financial services institutes that monitor all financial players. So, we can create that body for supervision.
“The third function of the bank is connected with the first one which is the management of the national payment system, but anyone can manage the national payment system.”
Government last week abandoned a decade old multi-currency system and reintroduced the local dollar as sole legal tender in all domestic transactions, drawing brickbats from the opposition.