Government To Recalculate Interest On The RBZ Debt It Assumed 3 Years Ago As It Suspects Being Overcharged By Lenders

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RBZ Building entrance, Fintech Regulatory Sandbox, Mid Term Monetary Policy Statement

Just 3 years ago the government bankrolled the central bank by taking over its $1,4 billion debt in order to recapitalize the bank and resume its function on a clean slate. To facilitate this, the government in turn borrowed from the domestic market through Treasury Bills (TBs) which are short-term negotiable instruments.  At that time the analysts warned that the government had no capacity to assume the debt as the country was (and still is) already overburdened with foreign debt.

With how large the debt it was assuming and the backlash it caused with analysts one could have been led to think that the government exercised due diligence before taking over the debt but apparently it didn’t. According to a report by The Herald the government is going to hire a consultant to recalculate the interest of the TBs and see if it overpaid its creditors. And any debtor who is deemed to have overcharged the government will have to revert back some money to the government and possibly face litigation. Speaking about the issue, the government stated;

The consultant shall be responsible for identifying creditors who could have overcharged and paid interest, recalculate the interest and enforce the recovery of such overpaid interest… This could be done through the application of law or technical financial expertise lenders may have violated in the process of charging interest to Government.

As this arrangement was done during the presidency of Robert Mugabe, which was marked by gross mismanagement, it stands to reason that little to no due diligence was practiced to study whether the government was accessing credit through TBs at fair rates. Whilst it’s commendable that the new government want to try to rectify the past mistakes, it may inadvertently scare away prospective lenders.



  1. Tungamirai Gotora

    What nonsense. is that not what the market demanded? So what other fair method is there for rate determination? Liquidity conditions on the day of the trade are what matter, not what is prevailing today, or what will prevail 20 years from nw. I wonder who this consultant is ambodya mari yedu matxa payers?

  2. Steve Hove

    Very strong but foul mouthed and ignorant comment from Gotora unfortunately.The market can demand, but the law prescribes. The fair method is to charge interest in terms of the law. Without details of the assignment one wonders how any citizen can express outbursts such as those of Gotora. He/she appears to harbor serious bitterness that has just been directed to a noble government interest verification program. National reconciliation is indeed needed to release pressure from citizens such as Gotora. God bless Zimbabwe and its people!