RBZ governor defends quasi-fiscal operations

RESERVE Bank of Zimbabwe (RBZ) governor Gideon Gono says his quasi-fiscal operations have been made “to defend the country’s infrastructure networks”.

In a letter to David Butau, the chairman of the parliamentary portfolio committee on Budget, Finance and

Economic Development, Gono said his quasi-fiscal interventions had saved the country’s infrastructure networks “from total collapse due to inadequacy of traditional fiscal revenue streams”.

In his letter to Butau, sent a day after his presentation to the committee on Monday, Gono said he had fully discussed “the growing incidence of some parastatals, such as Zesa and Air Zimbabwe, claiming for foreign currency and getting allocations from the Reserve Bank without paying the corresponding local currency”.

Gono has come under fire from certain quarters of government who allege his quasi-fiscal operations have encroached into ministerial territory, undermining the powers of cabinet ministers and often turning ministries into Reserve Bank subsidiaries.

In his reflections on the country’s relationship with the International Monetary Fund (IMF) in May, Gono said the Reserve Bank Act mandated the central bank to undertake quasi-fiscal interventions, saying these had the tacit approval of the Ministry of Finance.

The central bank this year came under fire from the IMF which took Gono to task over quasi-fiscal operations on projects they said should have been funded by the Ministry of Finance through the budget.

The central bank had provided resources for dam construction, irrigation systems and infrastructure development, among others.

In his submissions to parliament, Gono said infrastructure network saved from collapse through his interventions included the railways network, power generation plants, water reticulations and irrigation systems, coal mines, telecommunication networks, iron and steel production plants as well as others related to the health delivery system and Air Zimbabwe. — Staff Writer.

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