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BY NDAMU SANDU
DESPITE Finance minister Tendai Biti being vocal on the need for reforms at the Reserve Bank of Zimbabwe (RBZ), the bank is operating without substantive deputy governors as the contracts of the incumbents expired in 2009.
Such a development is a fresh setback to the reforms at the central bank meant to align it with international standards.
The first step of the reforms was the amendment to the RBZ Act to allow the bank to concentrate on its core business.
The amendments entail that the bank should have two deputy governors appointed by the Minister of Finance in consultation with the President.
One of the deputy governors would act when the governor is away. The deputy governor or both deputy governors, as the case may be, sit on the RBZ board, according to the Act.
Under the current set up, the burden of running the bank falls on RBZ governor Gideon Gono as the appointed CEO, but without arms.
Gono told a parliamentary portfolio committee last year the absence of substantive deputy governors had resulted in him carrying an extra burden to run the institution.
The minister of Finance can draw up a list of possible candidates and forward them to President Robert Mugabe for approval.
Standardbusiness heard last week that it is not only the issue of deputy governors that Biti has to deal with, as he is still to constitute a crucial committee necessary to run RBZ.
According to the Act, there should be a Monetary Policy Committee (MPC), that is independent of the board consisting of the governor as chairperson, the deputy governor or deputy governors, as the case may be; the deputy chairperson of the board, and not less than five or more than seven other persons appointed by the President after consultation with the minister.
Members of the MPC must have knowledge, experience or expertise in matters relating to finance, banking and fiscal or monetary policy.
Its functions are to determine the monetary policy of Zimbabwe, to ensure price stability as defined by the Government’s inflation target and to determine interest rates for the economy in line with the Government’s economic policies and targets for growth and employment, among other things.
The Act says the committee shall submit its findings to the Board for information purposes only.
If the committee was in place it would have assisted Gono in writing the monetary policy statement which has to be announced by Tuesday.
Biti was said to be attending a meeting when Standardbusiness called on Friday.
Presidential spokesperson Geo-rge Charamba told Standardbusiness on Friday he was not sure whether President Robert Mugabe had received the names of possible candidates for deputy governor and the Monetary Policy committee as the President is on leave.
Charamba said it was the minister of Finance who was supposed to initiate the process and referred further questions to Biti.
Existing deputy governors’ contracts expired
Currently, there are three deputy governors — Charity Dhliwayo, Edward Mashiringwani and Nicholas Ncube — whose term of office expired in April 2009.
Standardbusiness heard last week that despite the expiry of their contracts, the Ministry of Finance has not either renewed their contracts or appointed new deputy governors. This means that the trio is working on gratuitous conditions and do not have formal powers and their decisions cannot be effective. They also cannot attend board meetings.
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