Zimbabwe Times
27 February 2010
By Our Correspondent
HARARE – The Zanu PF-dominated Senate has forestalled the Reserve Bank of Zimbabwe (RBZ) Amendment Bill through proposed amendments apparently meant to water it down further.
Zanu-PF on Wednesday adjourned debate on the bill – which seeks to curtail the Reserve Bank governor’s wide-sweeping powers – to March to allow themselves time to further study it.
This is despite last year’s adjournment ostensibly to give the legislators in the Upper House, again, time to study the same bill.
The latest adjournment on Wednesday was caused by Chimanimani Zanu-PF Senator, Monica Mutsvangwa, who tabled proposals to amend 10 clauses. The aim is, apparently, to water the bill down, analyst said.
RBZ governor Gideo Gono has been accused of overstepping his mandate. The MDC led by Prime Minister Morgan Tsvangirai wants him removed from the post.
Mutsvangwa alleged the bill sought to settle personal scores. She alleged, in its present form, the bill was a “law of the jungle.â€
“If people have axes to grind with a sitting governor, let us leave that to the executive, GPA negotiators and principals or courts for that matter,†Ms Mutsvangwa said.
“Arguments on whether Gono did right or wrong can be handled through other avenues not the bill,†she said.
MDC Senator David Coltart called Senator Mutsvangwa to order, telling her to stick to the clauses, as the House was not yet taking comments, which could only be presented during the second reading.
There are apparent efforts by Zanu-PF legislators to scuttle plans to reduce the powers of the central bank governor. Already Zanu-PF has incorporated a clause giving immunity to the bank governor and employees “for anything done in good faith and without negligence.â€
If the bill is passed in its current form, Gono will be exempt from prosecution. Gono has also been accused of corruption and taking money from bank accounts without the authority of the account holders.
The RBZ Amendment Bill was seen as the first major law to be passed by parliament since the unity government was formed. But progress is being stifled.
Senate resumes sitting on March 9 and it is not clear if it will immediately go on the order paper.
According to the bill, Gono’s powers will be reduced by appointing an independent chairperson and board for the bank. The amendments are aimed at ensuring the bank reverts to its core function of price and financial sector stability and stops quasi-fiscal operations that saw inflation reaching trillions percent.
The Bill was originated by Finance minister Tenadia Biti, and Zanu-PF believes the amendments are meant to contain and weaken the Reserve Bank governor, who the MDC also accuses vandalising the economy and recklessly minting cash, a situation that spawned record-beating inflation.
Gono rejects the charges and says he resorted to minting cash to bust sanctions imposed by Western countries at the instigation of the MDC.
The MDC also rejects the sanctions argument in turn, blaming instead repression, rights abuses and economic mismanagement for the economic recession.
Sources say Zanu-PF did not want the bill enacted any more. It seems Zanu-PF is intent on railroading massive amendments to the Bill in the Senate, where the party enjoys a working majority, elevated by appointed senators and chiefs, in the hung Parliament.
The amendments are also aimed at addressing corporate governance issues at the RBZ, which is not financially sound.
The bank’s indebtedness to local and international bodies is in excess of US$2 billion; it is facing crippling litigation from creditors. The central bank has been stripped bare and currently has no reserves, yet its gold and foreign assets must be around 40 percent of its liabilities, seriously compromising its role as the lender of last resort.
The amendments also seek to ensure that the central bank will never again dabble in fiscal activities.
The amendments will also ensure that a Monetary Policy Committee (MPC) is established, which will be chaired by the Governor, but who would be subject to control by the board.