HARARE: Government will recapitalise the Reserve Bank of Zimbabwe (RBZ) to the tune of $150 million to be able to resume its lender of resort function, Finance minister Patrick Chinamasa said yesterday.
The recapitalisation follows a $100 million injection into the bank early this year through the issuance of long-dated debt instruments.
“We have already recapitalised RBZ to the tune of $100 million, but that is not adequate. We hope to do more to give another shot in the arm of $150 million that fully capitalises it to resume the lender of last resort role,” Chinamasa said while unveiling the new RBZ board.
RBZ last performed its lender of last resort role in the Zimbabwean dollar era. The local unit, which is being decommissioned, was replaced by a multi-currency regime in 2009.
Chinamasa said the resumption of the lender of last resort function was part of a roadmap to restore confidence in the banking sector and the economy.
Measures to restore confidence include the assumption of RBZ’s $1,35 billion debt by government. The RBZ (Debt Assumption) Bill sailed through Parliament and was waiting President Robert Mugabe’s assent to become law.
RBZ has resumed its role as banker to government while a special purpose vehicle to buy non-performing loans in the banking sector was set up last year. The new board unveiled yesterday would be chaired by RBZ governor John Mangudya.
He will be deputised by Rita Likukuma. Other members of the board include the two deputy governors Kupukile Mlambo and Charity Dhliwayo (ex-officio members), farmer and diplomat Aaron Maboyi Ncube, industrialist and engineer Michael Nyabadza, former Delta CEO Joe Mutizwa and banker Onesimo Jacob Mukumba. Chartered accountant Cornelius Maradza, former banker Lazarus Murahwa and accountant Pauline Chapendama are also on the board. Chinamasa said the ministry would soon appoint its representative on the board.
The tenure of the previous board expired on April 30, 2014 and Chinamasa admitted that it had taken the ministry a long time to constitute the board as they wanted to identify people with the necessary skills and integrity.
“It’s poor corporate governance to allow an institution to have run for that long without a board. If it [RBZ] is ill, the whole economy will catch pneumonia,” he said. The multicurrency regime has limited RBZ’s influence. However, the institution has come up with measures such as the introduction of the bond coins to complement fiscal authorities.
