Reserve Bank of Zimbabwe to retrench 1600

RBZ Governor Dr Gideon Gono disclosed this to the Parliamentary Portfolio Committee on Budget, Finance and Investment Promotion yesterday.

He said the retrenchment would be one of the biggest to be carried out in the country by a single institution.
“We are looking at retrenching 74 percent of the central bank’s staff and I would like to say it is not one of the easiest tasks as it is going to be one of the largest retrenchments in the history of the country by a single institution.

“The binding philosophy that is going to guide whatever agreement that would be reached is fairness.
“It has to have a human face to it and has to be in line with the country’s labour laws and we cannot do things that are out of sight with the industry’s standards,” he said.

The central bank chief disclosed the approximate cost of the retrenchment exercise in camera, but said the RBZ board had cut the employees’ proposals by two thirds.

“The board made a determination and the works council and management staff associations have already deliberated upon the package. However, what the board recommended was a cut by two thirds to what the management and staff had proposed.

“From December 1 to last Friday, I was involved in negotiations on the issue and have concluded with some associations and have released them to advise their members,” he said.

Dr Gono said RBZ was working in consultation with the Ministry of Finance on the matter.
Some of the workers to be laid off, Dr Gono said, had served the institution for more than 30 years, while some of them were employed when the central bank engaged in quasi-fiscal activities.

The move was aimed at busting illegal economic sanctions imposed on Zimbabwe by the West, he said.

The activities have since been stopped and if the retrenchment exercise is successfully carried out, RBZ will remain with a lean staff of approximately 530.
Dr Gono told the committee that part of the US$1,2 billion debt saddling the RBZ was inherited from previous management and part of the liabilities dated back to the pre-independence era.

“We are currently saddled with a huge debt that strictly speaking, belongs to Government, which stands at US$1, 2 billion.

“Sixty-five percent of that is debt that this Governor inherited from previous administrations,” he said.

Dr Gono said the remaining 35 percent was incurred during his tenure to cover critical Government programmes such as the 2008 harmonised elections, farm mechanisation and procurement of maize, medicines and repayments to the International Monetary Fund.
RBZ also owes undisclosed amounts to the Malawi Central Bank, Reserve Bank of South Africa and Equatorial Guinea and local corporates and non-governmental organisations.

He said the debt overhang was constraining the central bank from carrying out its mandate and urged Government to address the matter urgently.

Cabinet has referred the matter to the principals for further deliberations.
Dr Gono also told the portfolio committee that Government was looking at ways of compensating people for the loss incurred when the Zimbabwe dollar was demonetised.

He said US$7 million had initially been budgeted for the exercise, but the process was suspended after Finance Minister Tendai Biti expressed concern that bank balances of the local unit kept increasing.
Dr Gono said he would consult further with Minister Biti, but said RBZ wanted to see people compensated for the losses.

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