Govt to take over fresh RBZ debt

The Reserve Bank of Zimbabwe (RBZ) is set to transfer several billions of the debt it holds to the Ministry of Finance and Economic Development after completing a debt consolidation exercise.

This comes after Cabinet in 2013 approved the takeover of the US$1,35 billion RBZ debts by the Government in what was expected to pave the way for the smooth recapitalisation of the central bank.

The new planned transfer of the unspecified debt currently sitting on the books of the central bank, will make the RBZ debt free for the first time in two decades.

However, the move will capacitate the bank and pave way for investment by both local and foreign investors. It will also improve the ability of the central bank to engage in fruitful commercial relationships, including the bank's ability to mobilise significant external lines of credit needed by the country.

Upon transfer, the RBZ debt reportedly running into several billions (ZWL) will be evaluated by Treasury to ascertain whether the financial liabilities were contracted for or on behalf of the Government.

Sources said part of the debt to be transferred to Treasury dates back 20 years ago, while a significant portion relates to legacy debts, blocked funds and obligations for services rendered to the Government.