By Tawanda Musariri
Members of the public have welcomed, with a great sigh of relief and joy, the stoppage of the assumption of debt by a vehicle set up by Government to assume unpaid debts that threatened the viability of noteworthy lenders.
The stoppage was declared by Minister of Finance and Economic Development Professor Mthuli Ncube in his maiden budget speech at Parliament yesterday.
The Zimbabwe Asset Management Company (ZAMCO) is a subsidiary of the Reserve Bank of Zimbabwe. Since its inception in 2014, it has bought off a billion dollars from the financial services sector’s Non Performing Loans (NPLs) book. ZAMCO is funded by the public fiscus.
Responding to the development, citizens took to twitter to cheer on Professor Ncube on his latest move aimed at folding the RBZ subsidiary. Among the subsidiaries of the RBZ, some are earmarked to be offloaded. Some of the subsidiaries include jeweller, Aurex; gold buyer and currency printer, Fidelity Printers and Refinery, foreign currency vendor from the Diaspora market, Homelink and export insurer, Export Credit Guarantee Corporation.
In his take on ZAMCO, Prof Ncube, in his budget statement said, “In my capacity as Minister of Finance and Economic Development, I subscribe to the call that I facilitate, with the support of the rest of Government, that the 2019 and future Budgets achieve distributive efficiency of scarce public resources towards strategic public service delivery, including promotion of production.
“Furthermore, Government has taken the position that there will be no further acquisitions of non-performing loans by Zimbabwe Asset Management Company (ZAMCO).”
Speaking on twitter over the new development, @wachenukar said, “2019 Budget. Mthuli Ncube kills ZAMCO. No more assumption of Debt by this entity. He who gives a loan which later fails to perform must suffer the consequences. The decision to give or take a debt between two people cannot be a national problem if that contract turns otherwise downstream. If allowed to continue, let ZAMCO come to assume the debt I owe my landlord. Who doesn’t want her sins paid for by a messiah?”
Members of the public had criticized the apex bank for assuming defaulted loans saying the banks had a responsibility to practise due diligence before dishing out loans. Concerned citizens had raised concern over the debt vehicle saying it was merely an instrument of transferring debt from the rich to the poor.
“Mr Speaker Sir, measures on reducing expenditures and mobilising more resources through taxes, ordinarily entail foregoing certain benefits and opportunities, and therefore, sacrifice.
“However, the objective is to build the basis for a prosperous economy, in line with our Vision 2030. And precisely, this Budget under the theme ‘Austerity for Prosperity’ promises a better future by doing the right things henceforth,” said Prof Ncube.
