THE Reserve Bank of Zimbabwe will soon surrender its shareholding in private companies and four of its six subsidiaries if parliament passes a Bill to clip the central bankâ€™s wings and those of its governor Gideon Gono.
The Bill â€” Reserve Bank of Zimbabwe Amendment â€” was gazetted last week and is meant to streamline operations of the bank in a bid to halt quasi-fiscal operations.
Finance minister Tendai Biti and multinational financiers blame the supra-ministerial activities of the bank for accelerating the decade-long economic decline.
Information gathered by the Zimbabwe Independent shows that the central bank would give up shareholdings in a number of companies which include Carslone Enterprises (mining); Fiscorp (Pvt) Ltd, Homelink (Pvt) Ltd (property development) and the Export Credit and Guarantee Company.
Apart from these the central bank also has shareholdings in three listed companies â€” Tractive Power Holdings, Astra Industries, and Cairns Holdings, all controlled by the Finance Trust of Zimbabwe, an investment vehicle linked to the Reserve Bank.
The central bank would however retain control of jewelry concern Aurex (Pvt) Ltd and money-printing Fidelity Printers and Refineries, amid a push by Gono for the return of the Zimbabwe dollar.
â€œSubject to Subsection 2, all the shares held by the Reserve Bank of Zimbabwe in any company incorporated in Zimbabwe in which it has a majority shareholding are hereby transferred to and vested in the state, and the shares shall be held on behalf of the state, notwithstanding anything contained in the memorandum and articles of association of the company in question, by the head of the ministry to whom the company in question is assigned,â€ reads the Bill.
The reforms would also see one of the three deputy governors to Gono, Charity Dhliwayo, Edward Mashiringwani and Nick Ncube, facing the axe after the Bill proposed to reduce the deputies to two.
Currently the Reserve Bank Act states that there shall be a governor of the bank and not more than four deputy governors.
The cash-strapped central bank, the Bill further reads, would be prohibited from lending or advancing any foreign currency to the state.
â€œThe bank shall not lend or advance money to the state or any fund established by the state unless the money is denominated in Zimbabwe currency and the loan or advance is either repayable within twelve months after the end of the financial year in which it was made, or convertible at the end of the financial year in which it was made into negotiable bearer securities issued by the state,â€ the Bill reads.
The new Bill also proposes the establishment of a Monetary Policy Committee, independent of the board of directors, which would be in charge of formulating monetary policy. The committee would be chaired by the governor.
On the oversight of bank operations, the Bill proposes the setting up of a committee of the central bank board chaired by the permanent secretary of Finance and all members of the board, â€œwhich shall meet twice in each financial year and shall review the operations of the Reserve Bank to ensure that they are conducted in compliance with the Act and in accordance with best corporate practiceâ€.