Reserve Bank reform bill approved by Senate

By Lance Guma
10 March 2010

A reform bill, meant to trim the excessive powers of the Reserve Bank governor, sailed through the Senate on Tuesday, despite ZANU PF having earlier threatened to scupper it. Analysts are divided over who has come out the winner in the power struggle after both ZANU PF and the MDC-T had to trade concessions to have the bill approved.

Since last year ZANU PF has been arguing that the suggested reforms were heavily tilted in favour of the MDC Finance Minister, to the disadvantage of the ZANU PF central bank governor. Even after the lower house of parliament had approved the bill they kept threatening to attach 10 amendments to it in an attempt to swing the balance of power back in Governor Gideon Gono’s favour.

The MDC-T meanwhile did not have it all their way. In order for the bill to be initially approved by the lower house of parliament they agreed to a provision that granted Gono and other senior bank officials immunity for any crimes they committed during their tenure. Only when they put in this provision did ZANU PF agree to support the bill.

Activists reacted with outrage at the concession that allowed the man accused of funding the repressive regime to have immunity against any prosecution. Gono was a key member of the notorious Joint Operations Command that led the campaign of terror and murder in the run up to the June 2008 election.

The second stage of the approval process, which was the Senate, became another battleground as ZANU PF sought to amend the previous version of the bill passed by the lower house. The MDC-T at this stage also retaliated by threatening to attach an amendment that removed the immunity for Gono and his officials. In the end the Senate approved exactly the same version of the bill agreed earlier. What’s left is for Mugabe to sign it into law.

So much for the brinkmanship, who has come out the winner? An analyst we spoke to said Finance Minister Biti had got his wish to force the central bank to ‘stick to its core business of monetary policy management and stabilization of the Zimbabwean dollar.’ With no signs that the Zimbabwe dollar will be back anytime soon, Gono in the meantime does not have much to do and predictably has been keeping a low profile of late.

London based economic analyst Bekithemba Mhlanga told Newsreel the motivation for ZANU PF agreeing to the bill in the end was money. He said reforming the central bank was vital to attempts to get external funding for the coalition government and even they could not run away from this reality.