Zimbabwe: Government sidesteps Parly to borrow $1bn
By Steven Mahwai
HARARE – The Zimbabwean government borrowed close to $1 billion from international lenders to finance its operations without involving parliament, according to Reserve Bank of Zimbabwe Governor, John Mangudya.
Appearing before the portfolio committee on Public Accounts, Mangudya admitted that government had not sought approval from or informed parliament on the borrowings.
“What we did was under the RBZ ACT, we had the ministerial consent, what we did had legal opinion and what we did had national interest of this country but otherwise going forward we will advise the minister that can you please take this loan to the parliament of Zimbabwe so that they will get approval,” Mangudya said.
Committee chairperson Tendai Biti, who is also a former finance minister under the inclusive government, grilled Mangudya on why the state was borrowing and parliament being left out.
“The Constitution says any international treaty which has been concluded or executed by the President or under the President’s authority does not bind Zimbabwe until it has been approved by Parliament. You had an obligation to seek for approval from parliament and when you pay those loans without parliament approval you will be acting illegally,” Biti said.
In his defence after an exchange of words with Biti, Mangudya reminded the MDC MP that even during his days as finance minister, government borrowed money from international lenders without any parliamentary approval being sought.
“Let’s not forget history, there are loans that you also signed as the Minister of Finance under the RBZ Act and those loans never went to parliament,” Mangudya said.
“I can remind you one loan Mr Chairman, the one that we did me, yourself and the former Prime Minister,” Mangudya said after he had been accused of taking and repaying loan without sanction from parliament as require by law.
Biti did not take the response from Mangudya easily and had to end the discussion on the matter.
“You are out of order now. Don’t talk about my tenure as minister when your bank has borrowed almost a billion that the parliament has not approved,” Biti charged.
The Zimbabwe government has been borrowing from the international institutional such as the Africa Development Bank, Afreximbank and China.
The country’s international debt stands at more than $7 billion while the local debt stands at $9 billion.