RBZ Debt Assumption Bill - HB 7-2014

H.B. 7, 2014.

Gazetted:  Friday 13th June 2014.

 

RESERVE BANK OF ZIMBABWE (DEBT ASSUMPTION) BILL, 2014

EXPLANATORY MEMORANDUM

 

This Bill seeks to provide for settlement of certain liabilities incurred by the Reserve Bank of Zimbabwe.  The State, in terms of the Bill, assumes the debts specified in the Schedule which are subject to validation.

In particular, the individual clauses of the Bill provide as follows:

Clause 1

This clause sets out the short title of the Bill.

Clause 2

This clause provides for the interpretation of certain words used in the Bill, notably “creditor”, “Debt Management Office” and “prior debt”.  This clause also describes some of the functions of the Debt Management Office (a department of the Ministry of Finance set up in 2010); this is the body which will validate and reconcile the Reserve Bank’s debts which the Government proposes to assume under this Bill.

Clause 3

This clause seeks to set a line of demarcation for prior debts.  The prior debts to be assumed by the State are those incurred by the Reserve Bank before 31 December 2008.  These “prior debts” are itemised in the Schedule and are subject to validation and reconciliation in terms of clause 5.

Clause 4

Under this clause, the Minister of Finance and Economic Development, on behalf of the State, will assume the responsibility for the discharge of outstanding obligations of the Reserve Bank under agreements and instruments of prior debts which are subject to validation and reconciliation. The terms and conditions under which the Minister assumes responsibility for the discharge of any obligation will be fixed by the Minister.  The prior debts may be liquidated by the issuance of government-backed debt instruments.  No action may be instituted against the Reserve Bank for all prior debts assumed by the State.

Clause 5

All claims arising from prior debts shall be subject to validation and reconciliation by the Debt Management Office and, consequently, no claim will be settled unless it is so validated and reconciled.  All prior debts that are not assumed by the State will continue to be the debts of the Reserve Bank. 

Clause 6

Under this clause, obligations of the State arising from prior debts assumed by it will be treated as State loans under the Public Finance Management Act.

Clause 7

No stamp duty, tax nor any fee will be payable in respect of anything done for purposes of clearing prior debts.

Clause 8

After the Minister has satisfied himself or herself that all prior debts have been settled in terms of the Bill, he or she will advise the President to repeal this law by notice in the Gazette.

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