In a development which symbolises Zimbabwe’s liquidity crunch, the Harare City Council recently cut off water supply for more than two weeks to the Reserve Bank of Zimbabwe (RBZ) — banker and advisor to government and bankers’ bank and lender-of-last-resort — over a debt of more than US$500 000, the Zimbabwe Independent has established.
According to RBZ sources, the central bank owes the city fathers a total of US$522 764,69 in unpaid bill, leading to the water supplies being cut off.
Last week, RBZ and Harare City Council officials were locked in a series of meetings negotiating a payment plan.
The sources said the negotiations led to RBZ paying about US$80 000 of the bill.
Efforts to get a comment from RBZ public relations officer Alson Mfiri were fruitless as he had not responded by the time of going to print to questions sent to him last week.
Harare City Council spokesperson Leslie Gwindi could not be drawn into discussing the issue, saying he was not at liberty to give details on the matter and referred questions to the RBZ.
In June, government gazetted a Bill that will ensure it takes over RBZ debt as part of reforms at the central bank.The gazetting of the Reserve Bank of Zimbabwe (Debt Assumption) Bill would bring relief to companies and individuals that have been waiting to get their dues for years.
RBZ has a debt of US$1,35 billion.
The Bill seeks to provide settlement of certain liabilities incurred by the bank. In terms of the Bill, the State will assume the debts which were incurred by the RBZ before December 31 2008.
“Under this clause, the Minister of Finance and Economic Development on behalf of the state will assume the responsibility for the discharge of outstanding obligation of the RBZ under agreements and instruments of prior debts which are subject to validation and reconciliation,” the Bill read.
According to the Bill, the prior debts of the RBZ that are subjected to validation and reconciliation totalled $1 122 276 923,83 inclusive of arrears.
Some of the creditors whose debt is subject to validation and reconciliation include NMB (US$2,34 million), Zimplats (US$34,1 million), Mimosa (US$57 million), corporates Foreign Currency Accounts (US$131 million), Anglo American (US$103 million), parastatals Foreign Currency Accounts (US$99 million), gold bonds (US$43,7 million) and Non-Governmental Organisations Foreign Currency Accounts (US$25,77 million), among others.
Local authorities nationwide last week made a decision to cut debts by between 40% and 50% owed to them by commercial, industrial and institutional customers as a way of encouraging the payment of the bills.
Government departments as of May owed Harare City Council US$15,5 million and industry and commerce US$130 million.