HomeBusiness DigestRBZ to ‘recall’ Bacossi Financial Assistance

RBZ to ‘recall’ Bacossi Financial Assistance

THE Reserve Bank has been instructed to recall financial assistance and resources it provided to troubled companies through the central bank’s past quasi-fiscal activities.

Central bank chief Gideon Gono this week said the bank was under pressure from “relevant authorities” to demand back U$13,7 million it provided to 10 companies under the Basic Commodity Supply Side Intervention (Bacossi) — a supra-ministerial intervention undertaken to save companies from arbitrary price controls in June 2007.

Companies that benefited from the Reserve Bank project included bread and confectionary producer Lobels — US$6 million; National Foods — US$1,7 million; listed concern Dairibord — US$1,3 million; Megapak (a subsidiary a Delta Corporation) US$1,2 million; Unilever — US$1,1 million; Delta, Schweppes, United Refineries, Olivine and CFI Holdings were advance a combined US$2,4 million.

Gono said his decision to recall the money came from authorities” he did not mention.

 The Reserve Bank reports to the Finance ministry under MDC legislator Tendai Biti who has in the past criticised the central bank’s non-monetary policy activities.

 “Equally, institutions and companies that benefited under the Bacossi programme in cash or kind, particularly those companies that got foreign exchange support are hereby being forewarned that a recall of these resources is imminent under the recovery momentum being instructed upon the Reserve Bank by the relevant authorities,” Gono said.

The affected companies were not immediately available for comment on the matter.

The Business Council of Zimbabwe (BCZ), a grouping of various business organisations, declined to comment on the intended move by the central bank to recover the monies.

“I will not comment on that one (Gono’s statement),” BCZ president Kumbirai Katsande said. “I suggest you talk to the affected companies.”

Currently operating below capacity and desperately in need of foreign currency, companies that benefited from the Reserve Bank scheme might fail to pay back the credit at short notice.

In what could stir more controversy regarding Gono’s style of operations, the central bank boss admitted that he raided private banks, companies and donors’ accounts to finance government and private sector projects.

He said the central bank took foreign currency from private accounts to help pay US$2 billion in loans to state owned companies and utilities and for power and grain imports.

“Immediate reimbursement to the central bank … will enable the Reserve Bank to also reimburse all corporate and NGO foreign currency account dues,” the central bank said.

In an effort to pacify a brewing storm between the central bank and the fiscus, Gono said there should be an end to past misdemeanours.

“Our call is to let bygones be bygones and for everyone and every entity to start anew and open a new page, as repeatedly called for by the principals to the inclusive agreement,” he said.

Efforts to get comment from Biti and his permanent secretary Willard Manungo on how the “imminent” proposed action to recall the funds advanced to the companies would be carried out were in vain.


Recent Posts

Stories you will enjoy

Recommended reading