New Zimbabwe.com

PDP: RBZ must stop quasi-fiscal activities

THE Reserve Bank of Zimbabwe (RBZ) must stop usurping the functions of government ministries and focus on its core mandate as provided in its constitutive legislation, an opposition party has said.
Vince Musewe, People’s Democratic Party’s economic affairs secretary, has told government to stop the central bank from acting like a government ministry to the extent of relegating its core mandate.
This follows an announcement by Patrick Chinamasa that the Reserve Bank of Zimbabwe is taking over mining activities in Marange.
“This is one of the many signs that the Reserve Bank is back to its shenanigans of the past.  The RBZ during that period ran quasi fiscal activities, literally moving government functions from the ministry of Finance to the Central Bank,” said Musewe recently.
“Serious ramifications of the move were observed; the biggest being the debt accumulated by the central bank which was later adopted by government through the RBZ Debt Adoption Act of 2015.
“What we find shocking is the fact that ZANU PF has failed to learn from its previous mistakes. In fact, ministers whose functions are being usurped have accepted to be subordinate to the Central Bank.
“The government must do its fiscal work through the ministry of Finance; the ministry must be vested with the sole responsibility of funding projects approved by government through cabinet.”
Section 6 of the RBZ Act mandates the central bank to regulate Zimbabwe’s monetary system, foster the liquidity, solvency, stability and proper functioning of Zimbabwe’s financial system, supervise banking institutions, formulate and execute the monetary policy of Zimbabwe, provide banking services and advise to the fiscal agent of the state.
However, recent developments have seen the RBZ usurping powers vested government other ministries by initiating and funding projects which fall under several existing ministries.
The deputy governor of the Reserve Bank also announced at a Women’s Day celebrations function that the Central Bank will unveil $76 million dollars to fund women’s projects and has assumed the responsibility as guarantor of the relationship between ZESA and ESKOM which is also an activity outside ZESA’s jurisdiction.
Musewe said, “While there is a possibility of the temptation to celebrate the short-term outcomes, ignoring the prescribed mandate of the RBZ will only result in catastrophic results, historical events already substantiate our claim.”Advertisement

While the bank is busy with duties outside is mandate, Zimbabweans have been enduring biting cash shortages that has seen citizens, including major foreign currency earners such as tobacco farmers, enduring cold nights at banks.
The bond notes introduced about seven months ago have failed to easy the shortages. Instead they have created another foreign currency black market and an increase in commodity prices despite them being officially rated at par with the US dollar.