CBZ Holdings says it is holding more than US$200 million in treasury bills (TBs) and remains confident government will honour its repayment obligations as maturities fall due.
TBs are short-term government debt instruments issued to raise funds for public expenditure, usually with tenors of 91, 182, or 365 days.
Over the years, however, concerns have been raised about their management, with allegations of misuse and corruption around the instruments.
CBZ group chief finance officer Joel Makombe said while the government could improve its administrative efficiency, the bank was comfortable with its exposure and intended to hold the securities to maturity.
“The value of our treasury bills is just above US$200 million with various maturity periods. Obviously, it’s an asset that we want to hold to maturity,” Makombe said.
He added that some maturities from last year had already been honoured in full by the government, which had reinforced confidence in the asset class.
“We had some maturities that
happened last year, which the government has fully settled. So, we are able to perform our treasury bills,” Makombe said.
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He noted that not only CBZ but also other banks and private corporates were exposed to TBs, making government’s consistency in servicing the instruments critical for financial market stability.
“Administratively, the government will do better in terms of settlement of the maturities,” Makombe said.
Treasury bills remain a key funding and liquidity management tool for government, and CBZ’s sizeable exposure underscores the central role of banks in financing fiscal operations.
However, concerns have persisted in the market.
Banker and financial expert Tawanda Nyambirai recently criticised the way TBs were being discounted, warning that regulatory behaviour had undermined confidence in the instruments.
“But we have had the situation where Treasury Bills come to maturity, and this has resulted in a situation where these bills are discounted at ridiculous rates, which itself also has an impact on the cost of funding, and this is a regulatory behaviour that completely erodes confidence in the regulator and in the financial se rvices sector,” he said.
“The result is we now fear the regulator because if we happen to hold their paper, they have so much discretion.
“The paper is no longer what it used to be. They promise to pay only a particular debt and a particular amount, but they can decide to ignore that promise and not others.”
Nyambirai added that the discretion exercised by authorities over repayments had turned the regulatory environment into “a graveyard of capital”.
