HomeBusiness DigestParastatals fail to account for RBZ funds

Parastatals fail to account for RBZ funds

Paul Nyakazeya

MOST parastatals and local authorities have failed to account for the billions of dollars they have received from the Reserve bank of Zimbabwe (RBZ) since


The central bank has been auditing the parastatals and local authorities for the past three months to check on how they used the money they received under the Parastatals, Local Authorities Reorientation Programme (Plarp).

The audits were meant to cover the period from January 1, 2005 to October 31, 2007.

RBZ sources this week told businessdigest that more than 90% of parastatals have failed to account for the money they received from the central bank. Since 2005 the central bank has been distributing money to parastatals and local authorities for recapitalisation and operations.

The initial arrangement was that the local authorities and parastatals would submit audited accounts to the central bank on six month intervals. It has however emerged that most authorities and parastatals have failed to meet this condition forcing the central bank to use its own auditing teams to carry out the audits.

“While other can at least physically point out what they did with the money, most can’t even show how they used the money,” said a RBZ source. “It would seem that that most parastatals used the money for other things that were not in the official agreement when they got the loans from the RBZ.”

No official comment could be obtained from the central bank at the time of going to press.

Sources however said no parastatal “came clean” during the audit which started in October last year.

A decision on what to do will be made soon, the source said.

“The governor is most likely to present the bank’s findings (on the parastatals) in the next monetary policy. From the findings major restructuring at management level could be on the way for some parastatals,” said an RBZ official who was involved in the auditing process.

Businessdigest also understands that most parastatals were not cooperating with the RBZ auditors.

The central bank is also currently auditing line ministries which have also received money under the quasi-fiscal operations.

The Reserve Bank governor Gideon Gono last year said companies that fail to account for the previous allocations will not get more funds from the bank.

The RBZ has been criticised for fuelling inflation by printing money in order to fund quasi-fiscal operations.

Gono has however defended the quasi-fiscal activities saying without balance of payment support, it was impossible to implement liberal policies.

Presenting his last monetary policy Gono said: “How do we implement liberal policies when at every turn there are local and international economic agents whose sole role has now been prescribed as that of undermining anything and every attempt we make towards stabilising our economy as part of political games?”

The list of beneficiaries who received money from the Reserve Bank last year included communal farmers, women and youth, local government authorities. At that time analysts criticised the decision to give out money without proper accounting systems.

Zinwa and local authorities benefited from a US$5,25 million revolving fund. The Agricultural Sector Productivity Enhancement Facility has so far benefited from $3,9 trillion.

Tobacco, cotton, maize and Soya bean farmers also got a fair share of Gono’s generosity. Parastatals such as ZBC, NRZ and Zesa have also benefited from RBZ loans but their operations have not improved.

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