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(TALKZIMBABWE) Zanu PF to block RBZ Bill

Zanu PF to block RBZ Bill
TSM/TZG
Sun, 15 Nov 2009 03:35:00 +0000

ZANU PF has resolved to block the Reserve Bank of Zimbabwe Amendment Bill, which seeks to curtail the powers of the office of central bank governor, because the proposed amendments are “targeted at an individual rather than an office”.

In an interview last week, Zanu PF House of Assembly Chief Whip Joram Gumbo said party legislators took the decision after it became apparent that the Bill is a “firefighting” tool.

He said indications that it is a transitional regulation exposed the author’s ulterior motives. “It is going to face opposition because it is attacking people and not addressing an office,” he said.

“It is a firefighting tool meant to deal with the current situation, and pronouncements of it being a transitional arrangement make this all the more clearer.”

Last Tuesday, the Minister of Finance, Tendai Biti, presented the Bill for the second reading after having introduced it in the House of Assembly last month.

The proposed law, among other provisions, aims to repeal the RBZ’s advancement of Government’s economic policies and to compel the governor of the central bank to seek the minister’s approval before representing the country at international fora and before granting loans to the State or State-established funds.

It is also intended to facilitate the transfer to the State of all shares that the Reserve Bank holds in any company.

The Secretary for Finance is earmarked to sit on the bank’s board and to chair an “oversight committee”, which would examine the institution’s affairs.
In his second reading speech, Biti accused the central bank of disregarding sections of the law.

He said the bank strayed from its core functions because of “inadequate” supervision by the board and further advocated the separation of powers between the Governor and the board.

“At the core of the proposed amendment is the restoration of confidence in the central bank, which confidence is non-existent at the moment,” he said.

“It is also apparent that digressions by the Reserve Bank from its core functions have been exacerbated by inadequate supervision by the board, reflective of the non-separation of powers between the governor and the board,” said Biti, adding that he had reservations over the powers that his Cabinet colleagues conferred on him through the Bill.

Members were expected to make submissions afterwards, but this segment and the subsequent reading of the Bill had to be deferred to this week following representations by Gumbo.

Chivi Central legislator and co-chair of the Parliamentary Select Committee on the New Constitution Munyaradzi Paul Mangwana said separating monetary and fiscal operations as well as refocusing the bank’s mandate was commendable.

He, however, said attempts to turn the Central Bank Governor into a “lame duck” would not be tolerated.

He revealed that Zanu PF last Wednesday submitted proposals for the Ministry of Finance to amend the Bill.

Mr Biti could not be reached to comment on the matter yesterday, but earlier reports say he had accepted that the Bill with its current provisions gave the Minister of Finance too much power.

“Zanu PF has taken the position that it will oppose the Bill. We have made proposals to Biti to amend the Bill if it is to pass,” said Mangwana.

“It is a contentious, unconstitutional, undemocratic and autocratic Bill and the worst piece of legislation that a country can ever come up with.”

Mangwana said the proposed law goes against the tenets of standard corporate governance practices, which advocate central bank independence.
He said passing the Bill into law would create a national bank administered by the minister and secretary.

“It should be noted that the minister is a political animal with short-term political interests,” he said.

“The nation cannot entrust its national institution into such hands as this increases the chances of the clause being abused.”

The select committee co-chair, who is also a lawyer, said the Bill is open to manipulation as it does not set parameters for the minister and runs contrary to regional moves to grant central banks autonomy.

He added: “The Bill wants to turn the governor into a lame duck. According to the Bill, he is not supposed to make decisions and such decisions should be made by the minister and the board.” — TSM/TZG

Labels: GIDEON GONO, MDC, NEOCOLONIALISM, RBZ, ZANU-PF

posted by MrK @ 5:36 AM