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'There is need to cleanse RBZ,' says Zanu-PF MP

by Staff reporter
30 Oct 2013 at 08:33hrs | Views
THERE is need to cleanse the Reserve Bank of Zimbabwe as part of measures to restore confidence in the central bank to foster economic growth and development in the country, legislators heard yesterday.

Masvingo Urban MP, Daniel Shumba (Zanu-PF) said there was need to cleanse the central bank as part of measures to attract investment in the country since the apex bank had been dogged by legacy issues.

Shumba said this while making a contribution during a Parliamentary portfolio committee on Industry and Commerce in which the Zimbabwe National Chamber of Commerce had been invited to give its views on what needs to be done to improve capacity utilisation.

The RBZ took away foreign currency balances held by various companies as part of sanctions-busting measures at the height of Zimbabwe's economic meltdown in 2007 and since that time it has not been able to replace the funds.

According to the RBZ, the money was taken to fund critical national obligations at a time the economy was haemorrhaging due to the effects of the West's illegal sanctions regime. The RBZ is now facing litigation as companies and individuals seek to recover their money.

Shumba jokingly likened the cleansing to what he went through before rejoining Zanu-PF after being suspended by the party in 2004.

Individuals and corporates, said Shumba, lost money to the central bank when the central bank was carrying out quasi-fiscal operations.

"The previous quasi-fiscal activities that the Reserve Bank was involved in, cannot be just wished away, people, industry, local and international banks lost money,"said Shumba.

"So when you look at confidence issue you need to address that and sometimes you need cleansing and when you talk of cleansing I am a reminder," he said.

Shumba said he agreed with concerns by industry that mininglicensing fee that hovered around US$100 000 was unsustainable.

Earlier on, ZNCC deputy president, Mr David Norupiri said 30 firms that were into diamond polishing and cutting had closed shop due to high fees.

ZNCC chairperson for macro-economy, Mr Brains Muchemwa had also said there was need to recapitalise the central bank to restore investor confidence.

Source - herald
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