Finance Minister Under Attack Over Unsanctioned Borrowings

Finance Minister, Mthuli Ncube is under fire for failing to seek Parliamentary approval get loans from the African-Export Import Bank (Afrexim Bank). The NewsDay reports that Zimbabwe has so far borrowed USD$1,25 billion from the Afrexim without following laid down procedures.

The minister admitted whilst responding to a question by Mt Pleasant MP Samuel Banda (MDC) in the National Assembly recently that the government breached the law by taking loan facilities without approval of Parliament. He said:

When the question was posed, the figure was US$753 million and then you add the other US$500 million, so that takes us to US$1,25 billion.

Section 300 of the Zimbabwean constitution amemndment number 20 of 2013 provides that the Finance minister is supposed to seek Parliamentary approval to borrow from Afrexim Bank. It also sets limits on borrowings, obligations and stipuilates that those limits must not be exceeded without the authority of the National Assembly.

MDC Vice President, Tendai Biti argued that the move was welcome although the law was violated. He said:

The law is very clear that you cannot contract a debt with an international organisation which imposes fiscal obligations on Zimbabwe before Parliament has approved, and if Parliament has not approved, that debt is invalid. Why does the government keep on borrowing money from the African Export Import Bank without Parliament approval?

Ncube failed to explain why the Afrexim Bank continued to grant Zimbabwe loans despite absence of collateral. Ncube said the latest $500 million borrowed from the Afrexim was intended help the country in meeting the demands for the US$ and external payments.

More: NewsDay