Maravi

(HERALD) Biti puts Zimra funds into enemy hands

COMMENT - With the passing of time, the MDC are being shown for the treasonous neoliberal regime change agents that they are. What on earth is a finance minister doing, depositing Zimbabwean tax revenues in foreign banks, including from countries that have outstanding economic sanctions against Zimbabwe! Oh and by the way, Morgan Tsvangirai's brother Casper owns a goldmine. I guess I can now officially change the name of the MDC-T to the MDC-Tea Party.

Biti puts Zimra funds into enemy hands
Saturday, 30 July 2011 22:50
By Munyaradzi Huni

FINANCE Minister Tendai Biti is at the centre of a storm following revelations that he directed the Zimbabwe Revenue Authority (Zimra) to deposit all its revenue into private banks, some of which are hostile to Zimbabwe through their parentage in Europe and America, shunning the exchequer account that is domiciled at the Reserve Bank of Zimbabwe. According to provisions of the Constitution, one of the main functions of the RBZ is to be the banker of Government.

It is understood that when he took over as Minister of Finance at the formation of the inclusive Government, Minister Biti gave a directive to Zimra without approval from Cabinet that all revenue collected be deposited into several accounts strewn all over the banking sector, instead of the exchequer’s account domiciled at the central bank as had been happening since 1980.

Although Minister Biti could not be reached for a comment yesterday as his mobile phone was unreachable, Zimra’s director of Legal and Corporate Services, Ms Florence Jambwa, confirmed that indeed the authority is depositing all its revenue in about 14 private banks.

Ms Jambwa said Zimra had gone into partnership with banks such as BancABC, CBZ, Standard Chartered, FBC, MBCA, Kingdom, Interfin, Metropolitan, ZB, NMB, Stanbic, Premier/Ecobank, Tetrad and Agribank for the collection of revenue.

The likes of Standard Chartered Bank and Stanbic are international banks that get instructions from their head offices in Europe and America.
These two banks have also been accused of refusing to lend to either individuals or companies in the country as their head offices are situated in countries that have imposed sanctions against Zimbabwe.

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“In our quest to improve service delivery and ultimately bring real convenience to our valued clients, Zimra opened revenue accounts with various banks where clients can pay their taxes and duties,” she said. She added that she could not comment on the reasons why they were no longer depositing revenue into the exchequer account because “this
is a policy issue which we are unable to comment on. You may wish to contact the Ministry of Finance for further details on Treasury policies.”

When he presented his Mid-Year Fiscal Policy Review Statement last Tuesday, Minister Biti said given the total anticipated revenues of US$2,746 billion, the implied monthly average collection becomes US$230 million. A top Treasury source who spoke on condition of anonymity for fear of victimisation yesterday expressed concern saying at face value, it seemed harmless for Government to be depositing its fiscal funds in hostile international banks but “when one dissects the cycle of correspondent banking relationships between these so-called international banks and their parent institutions, it drives painful chills down the spine.”

Said the source: “The world over, central banks, as is the RBZ in our case, are creatures of statutes whose foundation lies in the constitution.
“Among several other functions, central banks the world over act as bankers to their governments. Likewise, here in Zimbabwe, the RBZ has one of its major functions as serving as bank of the Government of Zimbabwe. The significance here goes beyond the mere convenience of a close bank-client relationship but touches at the soul of what defines a country’s state security system.

“In America, for instance, when Hurricane Katrina struck in 1995 in August 2005, it was that country’s central bank, the Fed, that had to swiftly intervene to tackle the disaster.
“Central banks are also a secure repository for fiscal funds so that from a strategic point of view such funds do not fall into the hands of hostile forces.”
The sources said from 1980 when the country attained Independence up until the formation of the inclusive Government, all Government revenues collected in the economy encompassing PAYE, corporate income tax and excise duty among several other sources were deposited in the Government’s exchequer account domiciled at the RBZ in line with the constitutional mandate that the central bank be the banker to Government.

“Some of us who have been here for long were taken aback when Biti took over the reins at Treasury and single-handedly violated the provisions of the Constitution which created the RBZ as banker to Government and instead opened dozens of accounts strewn all over the place in the banking sector where currently Government revenues are sprinkled around.

“More tragic is the fact that some of the accounts where State funds are being deposited into and kept are at banks that are hostile not only to the Government of Zimbabwe, but to the people of Zimbabwe in general under instructions from their parentage in Europe and America.

“Here is the unfortunate connection being perpetuated by Minister Biti. First Zimra raises funds through taxes and other means and deposits at an international bank here in Zimbabwe. Such Government funds form that banks pool of liquidity resources. Under normal circumstances, the economy would benefit from such liquid resources as the bank lends to the borrowing productive sectors of the economy.

“However, the bizarre reality is that the so-called international banks are not lending in any meaningful way in response to their masters’ abroad singing the sanctions anthem. Instead, Government deposits are stashed in nostro accounts in Europe and America, effectively beefing up liquidity conditions in those markets.

“No wonder in those markets, when individuals and companies are borrowing, the interest rates they are charged are under 3 percent per annum, whilst here in Zimbabwe, the market is starved of the liquidity which rightly belongs to the people of Zimbabwe. As a result, borrowers here have to face punitive interest rates of over 40 percent per annum in some cases,” said the source.

The source dismissed theories by some “bootlickers of the West” who justify the interest rate differentials by saying that rates in Zimbabwe are higher because of the perceived high risk.
“This is hogwash and tired economics. Right now the American government is on the brink of collapse. If the legislature in that country refuses to increase the government borrowing ceiling by August 2 2011. By all accounts, therefore, in the realm of financial management, America is a literal war zone to any investor, far much more destabilised than Zimbabwe’s financial system,” said the source.

The source said the current approach “where Minister Biti single-handedly scatters fiscal revenues all over the place” impaired proper financial planning as resources are easier to manage when pooled together.
“Borrowing from military strategy, no general can feel safe when his enemies keep his armoury. In other words, the Zimbabwean Government should not feel safe when the hostile West are the ultimate holders of

Zimbabwe’s coffers thanks to Biti’s knee-jerk reactionary policies.
“Quite literally, Government cows are being consigned by Minister Biti to graze in Europe and America, chew the cud in Europe and America, bear calves in Europe and America and are also being milked in

Europe and America without much benefit to the people of Zimbabwe who are the owners of those cows.
“The current so-called liquidity crunch in the country is a man-made ulcer. In 2011, for instance, the size of the total national budget is around U$3 billion and in an economy whose average GDP is around

US$5 billion Government is therefore the major economic player amplifying the extreme danger to which Zimbabwe is exposed by storing fiscal funds in the armpits of declared hostile institutions.
“Could it be Biti’s adventures are deliberate to sabotage this economy? Does the leadership of this country, Cabinet as a whole and the Upper and Lower Houses of Parliament know that this is what is happening? The right thing must be done before it’s too late.

“Strangely, the so-called IMF experts have come and gone multiple times during Biti’s reign at the Treasury, the IMF on many occasions extensively looked at the books of the RBZ as well as helping Biti craft his eat-what-you-kill budgets but they raised no objection at all at the anomalous situation.

“We wonder whether the IMF is coming here in good faith or they are merchants of doom abusing their lofty status groomed over the years since 1945 when they were created in New Hampshire in the USA,” said the source.-The Sunday Mail

Labels: COLOUR REVOLUTIONS, NEOLIBERALISM, TAXATION, TENDAI BITI

posted by MrK @ 9:58 PM