THE Reserve Bank of Zimbabwe (RBZ) is operating without a board of directors, casting doubt on the legality of major policy pronouncements the bank has made, including the monetary policy and the issuance of bond coins.
According to section 21 of the Reserve Bank of Zimbabwe Act, the functions of the RBZ board are to determine the monetary policy of the country, “approve the annual reports and financial statements of the bank, prepare the budget of the bank, the setting of limits on open market operations by the bank” and determining interest rates for discounts and loans, among other responsibilities.
However, since the expiry of the last board’s term of office in May 2014, the RBZ has gone on to make major policy pronouncements, including the monetary policy, as well as introducing bond coins to ease shortage of change in transactions partly blamed for high prices.
Efforts to obtain comment from Finance minister Patrick Chinamasa were unsuccessful as he did not answer calls to his mobile phone.
RBZ governor John Mangudya also did not respond to calls or answer emailed questions about the issue. In terms of the law, it is Chinamasa’s responsibility to appoint the board.
The National Social Security (Nssa) and the Zimbabwe Revenue Authority are also operating without boards, a development which also raises doubts about government’s commitment to parastatal reform and enhancement of good corporate governance and inspire confidence from potential investors.
Zimbabwe has been meeting with high-level delegations from China, who like the multilateral lending institutions such as the World Bank and IMF, have emphasised parastatal reforms as among key conditions for investment agreements.
Even the European Union has said it will only consider direct budgetary support if government puts in place adequate systems to ensure accountability and transparency in the administration of public finances in its institutions, including parastatals deemed havens of corruption and mismanagement.
The presence of boards is one of the key requisites of good corporate governance.
Last week, Nssa told the Zimbabwe Independent that “the Minister of Public Service, Labour and Social Welfare is working on the matter”.
The social security authority refused to comment on the impact the absence of a board was having on its operations.
The previous Nssa board, whose term expired in August 2013, was chaired by lawyer Innocent Chagonda. He was deputised by corporate governance expert David Mutambara.
Other members of the board were Nssa general manager James Matiza (ex officio), Chris Hokonya, David Govere, Joseph Kanyekanye, Cecilia Alexander, Rosa Dube, Kennias Shamuyarira, Ephanos Makiwa and Memory Mukondomi.
The only board to be re-appointed last week was that of the State Procurement Board, where the chairperson Charles Kuwaza’s term was extended along with that of other board members to December 31 this year.
This was confirmed in an extraordinary government gazette published last Monday.