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Dr gono

Golden Sibanda Senior Business Reporter
FORMER Reserve Bank of Zimbabwe Governor Dr Gideon Gono says the central bank could raise more than $1 billion by disposing of non-core assets to clear its debt, but vehemently dismissed recent claims by a Parliamentary Committee that the debt was overstated.The ex-RBZ chief said discussions on the emotive issue of the RBZ’s debt should take into account assets and security it holds that Government could take and net off with its debts.

Dr Gono’s remarks follow claims by a Parliamentary Committee on Finance and Economic Development that the bank’s debt was grossly inflated.

Commenting in defence of the validity of RBZ’s debt, Dr Gono said he was constrained by banking laws and ethics to discuss in detail bank-client affairs in public or with unauthorised people. However, he said he supported the process to account for every cent.

The former RBZ boss said contractual obligations also did not allow him to comment in detail or with specifics on matters which, generally, a sitting governor was cable of dealing with.

Committee chairperson, Bikita West legislator Dr Munyaradzi Kereke, said figures in the RBZ Debt Management Bill were inflated by up to 2 500 percent and should be audited.

Dr Kereke picked the issue of the Meikles claim, which rose from $34 million in 1998 to $90 million, as the perfect example of one of the creditors who fraudulently inflated their claims.

But Dr Gono, the presiding governor of the apex bank when a significant portion of the debt was contracted, said he was available to explain to Parliament the entire make up of the central bank’s debt profile without risking confusion among key stakeholders.

On the Meikles debt, he said it was to be treated the same way other creditors were and its deposit with the central bank attracted the standard rate at which Government borrows from other entities.

“As is now, emotions are also unnecessarily evoked on such issues as farm mechanisation and some such others. Against the above debt, it is essential to highlight to legislators the other side of the RBZ balance sheet, that is assets . . . the debtors,” he said.

This also comes as Finance and Economic Development Minister Patrick Chinamasa and RBZ Governor Dr John Mangudya appeared before the Parliamentary Committee to explain circumstances around the debt and its proposed takeover by Government.

“Unfortunately, it is unfair for the nation or for the legislators to expect these two fine gentlemen to satisfactorily explain a $1,3 billion debt, the majority of which they were not party to its contraction.

“Both run the risk of being taken to the cleaners by people who want to confuse very simple matters of commerce and turn them into some scandal of sorts for ulterior motives,” he said, adding that what was before the legislators was a “one-legged transaction”.

Dr Gono said it should be noted that the central bank was owed about $1,5 billion by Government, which if paid would have extinguished the bank’s debt burden. The bank also holds assets that could be sold to clear the bulk of the topical RBZ   debt.

“How much does or did the Government owe the RBZ and has Government (taxpayer) paid the RBZ what it owes? What is the value of the non-core assets held by RBZ, which today can be auctioned to the highest bidder and raise no less than $1 billion,” Dr Gono said.

“All this and other matters relevant to the RBZ debt takeover can be made available to legislators if they call upon people with the requisite knowledge and are honest and truthful about the RBZ state of affairs than is currently being presented,” the ex-governor said.

He however, said he was not naïve as to expect the Budget and Finance Committee of Parliament to invite him to shed light on the crucial issue of the RBZ’s $1,3 billion debt because his appearance there would make “a few people feel uncomfortable”.

Dr Gono said his erstwhile advisor at the bank, Dr Kereke, risked whipping the tax payers emotions and portraying the image that corrupt leadership was appointed to the helm of the bank when he (Kereke) claimed Government could assume an inflated debt from RBZ.

He said the RBZ debt comprised pre-independence debt, debt accrued between 1980 and 2000 such as from International Monetary Fund, World Bank, African Development Bank, Meikles Limited, Anglo-American, Malaysia and others from 1998-2000. There also is the 2003-2008 and post dollarisation debt in the $1,3 billion figure.

Apart from the principal amounts, which exceeded $500 million when he assumed office in 2003, Dr Gono said attention should also be given to interest components, whether the borrowings where done above board and what the borrowed funds were used for.

Dr Gono said he was not trying to seek relevance or enter Parliament by default, but was trying to assist in a process “that is getting messy at the altar of ignorance and misrepresentation. “Zimbabwe ought to cherish good accounting practices and fair commerce.”