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Minister Chinamasa

Blessing Bonga Business Reporter
GOVERNMENT intends to create a special purpose vehicle (SPV) that will assume the Reserve Bank of Zimbabwe’s debt estimated at US$1,35 billion outside the central bank’s books, a Government official has said. Finance and Economic Development Acting Secretary, Mr Pfungwa Kunaka yesterday told members of the Parliamentary Portfolio Committee on Lands, Agriculture, Mechanisation and Irrigation that there are options being pursed in order to deal with the RBZ debt.

He was giving oral evidence on the central bank’s debt and the capital adequacy for the Agricultural Development Bank this farming season.

“What is happening in terms of RBZ debt is that we are not liquidating it at one go but the strategy that we are following is to create a special purpose vehicle which will assume the debt outside the RBZ book.

“So we are simply looking at parking the RBZ debt somewhere outside its books as opposed to immediately liquidating it and once we have the SPV in place, other new strategies will have to be taken to now deal with this debt without it continuing to affect the RBZ,” he said.

Finance and Economic Development Minister Patrick Chinamasa last December announced in his 2014 National Budget statement that Cabinet had approved the RBZ debt that accrued in the past years to an estimated US$1,35 billion be assumed by Government.

Mr Kunaka also said efforts to offload a 49 percent stake in Agribank to a potential investor were still on-going while the financial and legal due diligence processes have already been completed.

“Cabinet’s decision of May 2011 to privatise Agribank still stands and we are looking for an equity partner to claim 49 percent stake while Government will retain the remaining 51 percent. To date, the contracted technical team has completed the financial and legal due diligence processes and the next stage will be the asset and business evaluation which will then be followed by the bidding process,” he added.

Mr Kunaka said they would be looking at engaging an investment partner with a strong financial base that would enable the bank to mobilise funds on a continuous basis for onward lending.

Agribank chief executive, Mr Sam Malaba recently told the same portfolio committee that plans to privatise the bank were commendable as a way of capacitating it.

The move is expected to address capitalisation challenges that Agribank is facing which have continued to hamper its meaningful contribution towards the country’s agricultural sector.

In the 2014 National Budget, the bank was allocated US$4 million which Mr Malaba said was inadequate as they wanted at least US$50 million.