RBZ breaks own rules

Conrad Dube

THE Reserve Bank of Zimbabwe (RBZ) ignored parliament’s portfolio committee on public accounts’ recommendations against doling out taxpayers’ funds to troubled parastatals which are not in a posi

tion to repay the loans.


In its second special report on parastatals tabled before parliament this week, the committee said it was worried that such parastatals had continued to borrow from the Reserve Bank without addressing issues of corporate governance. The comptroller and auditor-general has also refused to sign hurriedly prepared financial statements from parastatals.


The public accounts committee monitors the use of public funds.

After producing audited accounts, parastatals are expected to submit them to line ministries which should table them in parliament. The portfolio committee then scrutinises the accounts and compiles a report that is deliberated on in parliament.


Parastatals that have so far benefited from the RBZ’s $122,5 billion lifeline under the Productive Sector Facility include Zesa ($50 billion), National Railways of Zimbabwe ($20 billion), the Agricultural and Rural Development Authority ($25 billion), Air Zimbabwe ($7,5 billion) while local authorities have received a total of $20 billion.


All of them have not submitted audited reports to the comptroller and auditor-general.


RBZ governor Gideon Gono, in his second monetary policy review in July, said parastatals wishing to borrow funds from the RBZ must produce turnaround strategies and externally audited accounts. The public bodies were also required to submit quarterly reports on their turnaround plans.


“Your committee was also concerned that some institutions, like Zesa for example, had received loans from the RBZ even though they had not submitted their audited financial statements to the Ministry of Finance and Economic Development. According to the comptroller and auditor-general, the financial statements could not be signed because of the complications arising from the non-existence of a board (of directors) at Zesa,” the report says.


The report states that further enquiries by the portfolio committee revealed that the parent ministry could not confirm receipt of Zesa’s audited financial statements.


In terms of the Audit and Exchequer Act (Chapter 22:03), “…no designated corporate body may borrow money temporarily or otherwise without the approval of the appropriate minister…”


“Your committee wonders what report was used to evaluate the Zesa turnaround strategy. Audited accounts of parastatals have to be submitted timeously and their reports submitted as required by the law without any exceptions at all,” the report says.


The portfolio committee said it was riled to learn that parastatals had produced “up to date audited accounts” just after Gono set this as a condition for them to get money. Almost all parastatals had been failing to submit audited financial statements going back more than five years.


The committee recommended to parliament that “loans to parastatals should be thoroughly audited. In addition, treasury instructions and procedures have to be adhered to at all times and no crisis management of such loans should ever be entertained.”