Friday, 25 October 2019

RBZ GOVERNOR THROWS CHINAMASA UNDER THE BUS


RESERVE Bank governor John Mangudya yesterday threw former Finance minister Patrick Chinamasa under the bus after he refused to take responsibility for the US$3,2 billion Treasury Bills that were unlawfully issued from 2017 to 2018 mostly for the Command Agriculture programme. 

He told Parliament that the illegalities were done by the Finance ministry, then under Chinamasa.

Mangudya had appeared before the Tendai Biti-led Public Accounts Committee to explain how the RBZ issued out the US$3, 6 billion TBs. 

The meeting was highly emotional and tempers flared between the RBZ governor and Biti as the PAC interrogated the central bank boss over the issuance of the TBs without Parliament approval causing massive inflation currently affecting the country.

Biti and Mangudya did not give each other chances to speak during the heated exchanges until Chirumanzu MP Barbara Rwodzi berated them and pointed out that the meeting was about the PAC doing investigations on the US$3,6 billion and must not be personalised to issues between Mangudya and Biti.

Tempers flared when Biti accused the RBZ of bad corporate governance, arguing it was the central bank that broke the law by failing to advise the Finance ministry that they were treading on illegalities.


“The Ministry of Finance spent money outside the blue book and when they appeared before PAC, they said it was not their problem and they passed the snake to you (RBZ), and the schedule says that you spent US$2,1 billion in 2017 and US$1,5 billion in 2018, and the bulk of the money was spent outside Parliament approval and the Appropriation Act by the RBZ,” Biti said.

“When we go to the specifics, they will show that 90% of the TBs were generated by the RBZ, and as central bank governor, it means that you were oblivious that the Finance ministry was overspending, and on what legal basis did the RBZ breach the Constitution by spending US$2,1 billion in 2017 and US$1,5 billion in 2018 which was not approved by Parliament?”

Mangudya responded: “The question should be referred to the Ministry of Finance who gave you the information. It is they who should answer to you. The money was not spent by the RBZ. We just get an instruction from the principal agent (Finance ministry) who wrote letters for us to issue payments for Command Agriculture, and it is the Ministry of Finance who should give you the reasons why.”

He added: “It means they should answer — not me. There was an instruction from the Ministry of Finance that I should release US$1,5 billion TBs for the purchase of maize from farmers.

If the Ministry of Finance, which is the Executive, gives an instruction for an account to be paid, is it legal? The answer is it was legal.”

The PAC said the release of US$840 million used to pay for local grain without Parliament approval in 2018 triggered the Auditor-General and PAC to notice that there was something amiss with the manner in which funds were being used.

When Agriculture ministry secretary Ringson Chitsiko appeared before Parliament, he said he did not know about the payments and yet it was purported to have been used to purchase grain which is the mandate of his ministry.

“The answer is that the RBZ did not overspend. The Ministry of Finance should answer that question,” Mangudya insisted.

Cornered, the central bank governor then produced a 2009 letter where he claimed that Biti was accusing him of illegally releasing TBs for agricultural purposes and yet during the government of national unity, he (Biti) as Finance minister signed for TBs to be released for Command Agriculture.

Biti then read letters between Chinamasa and the RBZ which showed that the features and terms and conditions in the TBs were defined by the RBZ and not the Ministry of Finance. The law states that the features must be defined by the Finance ministry.

“If you look at the letters from Chinamasa, he was setting you (RBZ) up and you did not realise that he was putting you in a trap when you unlawfully set the features of the TBs because even if you go to court, Chinamasa will say it was the RBZ which issued the TBs and he will get away with it,” Biti said. Newsday

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