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(TALKZIMBABWE) Biti, Gono rift widens over IMF loan

Biti, Gono rift widens over IMF loan
TH./TZG reporters
Wed, 23 Sep 2009 03:30:00 +0000

THE rift between the Reserve Bank of Zimbabwe Governor Dr Gideon Gono and Finance Minister Tendai Biti has widened as the two continue to argue about how best to use the US$510 million advanced to Zimbabwe by the International Monetary Fund.

Dr Gono warned that Zimbabwe is in danger of losing out on the benefits of the US$510 million loan if the discord surrounding its usage persists. Minister Biti last night insisted the package was part of the Consolidated Revenue Fund and would be allocated through the budget set for November this year.

Disbursements of the loan were said to have been stalled by an apparent war between the RBZ and the Ministry of Finance, largely over who should control the funds, according to reports from the capital Harare.

Dr Gono stressed last night that theories presented so far to delay the disbursements did not hold water, adding that the funds could be used immediately provided the Ministry of Finance gave direction on their usage.

"In the midst of all this flux of hypotheses and in many respects opportunistic media campaigns by some, the victims have largely been fellow Zimbabweans in their individual, household and corporate capacities alike.

"In strategy they say that when situations have become precarious to a point where survival is at stake, the circumference of elaborate orthodoxy must be narrowed down to give way to practical common sense that saves lives rather than waiting first to see corpses on the ground to be convinced of the looming danger," he said in a statement yesterday.

However, Minister Biti argued that an Appropriation Bill by Parliament would be required to disburse the funds and that the funds should be part of the budget which he is scheduled to present in November.

"These funds are going to be part of Zimbabwe’s budget provisions. I can’t break the law, I am a lawyer. These funds are not a substitute for fiscal prudence and fiscal wisdom," he stressed.

Minister Biti confirmed that he had received a letter from the RBZ with proposals on the disbursement of the funds. He also received submissions from the Bankers’ Association of Zimbabwe, the Chamber of Mines, the Ministry of Youth, the Infrastructure Development Bank of Zimbabwe and Zimnat Asset Management, among other players in the economy.

"The RBZ wrote to us a letter on the 30th of August or thereabouts for us to use the money on petrol, agrochemicals, fertilizer and seed maize," he said.

However, Dr Gono contends that he had proposed that funds be allocated to the mining sector, manufacturing, tourism, public utilities, loan repayment and RBZ recapitalisation among others.

Zimbabwe is facing acute shortages of foreign currency, a factor that affects capacity utilisation in all sectors of the economy, with most firms presently operating at an average 25 percent.

IMF deposited US$408 million on August 28 as part of the US$250 billion disbursed to member countries to ameliorate the effects of the global financial meltdown.

An additional US$110 million was escrowed by the IMF after Minister Biti wrote to the IMF to that effect. Minister Biti denied that he had indeed authored a letter that led to the witholding of the second payment, although the IMF said it had received the letter.

Dr Gono said on the day the funds were deposited, he sought audience with Minister Biti on the usage of the funds, but this was not responded to.

He dismissed as unfounded reports that the central bank intended to abuse the funds, saying only the Government, through the central bank could disburse the funds. He had forwarded proposals for consideration by the Ministry of Finance, "but these recommendations seem to have been ignored for reasons best known to those empowered to 'call the shots', so to speak.

"Contrary to the unfortunate alleged lies that ‘some quarters’ wanted to abuse the IMF funds, the only signatories who can trigger the movement of the funds are the Reserve Bank of Zimbabwe, under advice from Government through the Ministry of Finance.

"For the benefit and assurance of the public, the IMF funds cannot be accessed by any other third parties other than Government through the Reserve Bank of Zimbabwe."

In his statement, the RBZ chief chronicled events before and after allocation of the funds, giving an account of efforts made by the central bank over the past few years to save Zimbabwe from expulsion from the IMF.

As the war between the central bank and the Ministry of Finance took another dimension last night, Dr Gono said the country was being made to suffer by those that had "multiple objectives" which ran contrary to improving the welfare of the majority of Zimbabweans.

He said Zimbabwe did not need to pay heed to "poisoned advice" from abroad as that constituency meant harm.

"Zimbabwe is too rich to be poor," said Dr Gono saying the nation needed to focus on rebuilding the economy.

Minister Biti remained adamant that the money will only be disbursed as part of the November 2009 budget.

"What must be done must be done," he said, in apparent reference to the budgetary processes, which he said were at an advanced stage. - TH./TZG reporters

Labels: COLOUR REVOLUTIONS, GIDEON GONO, IMF, NATIONAL UNITY GOVERNMENT, TENDAI BITI

posted by MrK @ 6:49 AM