Thread by @newswireZW

Mangudya says ZAMCO was created to remove non-performing loans from bank balance sheets. The asset manager has so far acquired 1,016 loans worth $1.13bn. Of that, $260m has been repaid

Mangudya: Without ZAMCO, many companies would have folded, jobs would have been lost.
#MangudyaPAC

Biti asks who issued the Treasury Bills which ZAMCO used to acquire bad loans, Mangudya says the bills are issued by central government.
#MangudyaPAC

Biti and Mangudya sparring over over the status of funds the state uses to acquire debt through ZAMCO. “If this is a charge on the Consolidated Revenue Fund, as a committee we are greatly concerned that this has happened without central government coming to us.”
#MangudyaPAC

Biti: Parliament oversees the CRF, you (ZAMCO) have received $1.13bn, but Parliament has not been told.
#MangudyaPAC

Mangudya says all the amounts given to ZAMCO have been included in successive budget statements by Treasury. Biti counters, says this is not the case
#MangudyaPAC

Mangudya: In the last budget, Minister Ncube told Parliament that he was capping ZAMCO at $1bn, the asset manager will no longer acquire any further loans
#MangudyaPAC

Mangudya: ZAMCO is not our (RBZ) creation. This went through Cabinet and Parliament. The Minister took the numbers to Parliament and no one asked questions
#MangudyaPAC

Parliament’s Public Accounts Committee says because there are allegations of ZAMCO being abused to the benefit of political elites, it will request a list of all the 1,016 borrowers whose loans were taken over by ZAMCO
#MangudyaPAC

CEO Kanhai ZAMCO says is governed by customer confidentiality rules and will not be able to share details of beneficiaries. Biti counters, says ZAMCO is not a bank bound by confidentiality rules. “We have powers as Parliament to demand that list. We are demanding it.”
#MangudyPAC

ZAMCO CEO Kanhai says $250m of the $1.13bn loans have been paid back. Says he’s confident all the funds would be paid back by 2025, when ZAMCO is scheduled to be wound up
#MangudyaPAC

Biti insists that ZAMCO should hand over customer details to the Public Accounts Committee
#MangudyaPAC

Biti to Mangudya: What do you say to people who say ZAMCO is a toxic institution, acquiring toxic assets?
#MangudyaPAC

Mangudya: The RBZ position is that ZAMCO has done very well for this economy, without ZAMCO, this economy would have collapsed. Cites ZAMCO’s intervention to aid RioZim, as an example
#MangudyaPAC

Mangudya to Biti: ZAMCO has helped save companies such as RioZim, Windmill, StarAfrica, Ariston. Maybe one of your children is even employed by one of these companies. If these companies were not saved by ZAMCO, they would have collapsed.
#MangudyaPAC

Biti: Your Minister of Finance (Ncube) thinks ZAMCO should be wound down. What do you say to that?
#MangudyaPAC

Mangudya to Biti: When you were Minister of Finance, we used to talk about this. When I was at CBZ. These are old loans, companies were chocking under the burden of high interest rates, something you know about.
#MangudyaPAC

On the RBZ’s foreign loans, Mangudya says these amount to US$985m contracted by the central bank.
The bulk of the funding has been sourced from:

AfreximBank US$641m
PTA Bank US$152m
Banco de Mozambique US$25m
AfDB US$15m
PTA Reinsurance Corp US$9m

#MangudyaPAC

Biti, citing the Constitution, asks why the RBZ has been contracting loans without Parliamentary approval.
Mangudya counters, cites the RBZ Act which says only ministerial consent is required.
Biti: “Are you saying the RBZ Act is above the Constitution?”
#MangudyaPAC

RBZ lawyer Webster Madera weighs in, concedes the RBZ Act is subservient to the Consitution, but says the central bank operates in terms of the RBZ Act
#MangudyaPAC

Mangudya: As the Reserve Bank, we cannot ask the Minister, upon receiving his consent, to go to Parliament. We are not accountable for that.
#MangudyaPAC

Biti: Those loans are illegal, they are not binding.
Turns to RBZ lawyer, Webster, you know that, I taught you law.
#MangudyaPAC

Mangudya: Chairman, I thought we were communicating. I don’t sit in Parliament.
Biti: Governor, with respect, you don’t have a casual interest in ensuring Parliament has approved or not.
Mangudya: We have taken note. What we did was in the national interest, within the RBZ Act

Mangudya: Going forward, we will ask the Minister to advise Parliament.
Chairman, when you were Minister...
Biti: No no no, we’re not going into history.
Mangudya: When you were Minister, you approved some loans without Parliament
Biti: I’m ruling you out of order.
#MangudyaPAC

Biti: We are not here to discuss my tenure. When I was Minister, you were not at the Reserve Bank.
Mangudya: I have records...
#MangudyaPAC

Biti: We have to answer this question: was this non-compliance willful or due to ignorance. We need to establish this because it has a bearing on the report we will make as a committee
#MangudyaPAC

Mangudya says the nearly US$1bn foreign loans contracted by the RBZ are secured by future export proceeds for five years.
#MangudyaPAC

Responding to a follow-up question, Mangudya says the foreign loans are secured by gold exports for the next five years.
#MangudyaPAC

Biti: So, you’ve borrowed to lend government...
Mangudya: Mr Chairman, money is fungible. The world over, banks lend depositors’ funds. You imply we forced people to give us money for on-lending. We used the investment in the Bank, savings bonds.
#MangudyaPAC

Mangudya says $3.2bn worth of savings bonds have now been taken up
#MangudyaPAC

Biti: Governors, are you saying, under oath and as a man of God, that the central bank has not taken people’s deposits to lend to government?

Mangudya: The answer is no

#MangudyaPAC

On govt abusing the RBZ overdraft facility by exceeding the statutory 20% of the previous year’s revenue, Mangudya says “We’re all culpable, why does Parly pass the budget knowing fully well about the government’s deficit? Where do you think the money comes from?”
#MangudyaPAC

Mangudya: As Parliament, you must also be meticulous when exercising budgetary oversight
#MangudyaPAC

Biti: Do you have reserves as the central bank?
Mangudya: We have three to four weeks’ import cover, some US$500m
#MangudyaPAC

Now the questioning moves to bond notes...
#MangudyaPAC

Asked about his oft-quoted vow to resign if bond notes fail, Mangudya sticks to his guns. Says Bond notes, as an export incentive scheme did not fail. Exports have gone up
#MangudyaPAC

Mangudya: Bond notes have only failed in the eyes of those who don’t understand the export incentive. The bond note did not fail
#MangudyaPAC

Biti: By removing parity of the US dollar to the bond note, you admitted failure, why don’t you resign?
#MangudyaPAC

Mangudya: What failed is the economy, due to excess govt expenditure. We now had excess funds in the economy and couldn’t maintain parity
#MangudyaPAC

The Parliamentary Public Accounts Committee hearing with the RBZ has been adjourned to Monday, 11 March 2019

#MangudyaPAC