Blocked-funds payment scheme unchanged

Blocked funds are being paid out by the Government precisely as laid down over 15
months ago when Treasury took over the liability from the Reserve Bank of Zimbabwe,
and will continue to do so.

Treasury will neither entertain requests for payment deviations from recipients nor deal
with agents or other third parties as some are understood to be trying to do.

Cash payments of US$19 million have been made and US denominated Treasury Bills with
a face value of US$1,485 billion have been issued.

Blocked funds or legacy debts constitute debts and funds that Zimbabwean entities
incurred from foreign entities for goods, services and dividends and were unable to pay
due to a shortage of foreign currency.

In a statement, Secretary for Finance and Economic Development, Mr George
Guvamatanga said Government had come up with the structured payment modality
through an Act of Parliament and it was adhering to this without deviation and would
continue to adhere to it.

“The Government of Zimbabwe through the Treasury assumed the blocked funds
through the Finance Act No 7 of 2021 which provided the list of claimants approved and
registered by the Reserve Bank of Zimbabwe through the commercial banks of the
claimants.

“This was to facilitate the assumption of blocked funds by Government from the RBZ
following a series of currency reforms from the multi-currency system to the
introduction of mono-currency and a flexible exchange rate regime,” said Mr
Guvamatanga.

So as to expunge the blocked funds owed to each claimant listed in Finance Act No 7 of
2021, a structured settlement modalities had been approved by Cabinet and Parliament in
November 2021.

All claimants of less than US$1 million were being paid out in cash over five years
starting in June last year. The list was the RBZ approved and registered claimants list as
at 30 June last year amounting to US$51 million.

“To date, Treasury has made payments amounting US$19 million with a balance of US$
32 million which will be paid from April 2023 to September 2026,” said Mr Guvamatanga.
Larger debts were being paid out by issuing zero coupon Treasury Bonds.

“All claimants with amounts above US$1 million were issued with zero coupon Treasury
Bonds ranging from 3 to 20 years based on the outstanding amount. To date total TBs
amounting US$1,485 billion have been issued. These TBs are tradeable, have liquid asset
and prescribed asset status and are categorised.”

He stressed that Treasury would not deviate from the approved modalities and would not
entertain inquiries from third parties.

“Treasury has noted a significant amount of appeals from claimants for the deviation
from the approved settlement modalities.

“These appeals cannot be acceded to and are not sustainable. The claimants are therefore
advised that Treasury will adhere to the approved settlement modalities.

“In addition, Treasury noted with concern the appeals being made for payment through
purported representatives, agents or consultants of the claimants. Treasury wishes to
advise that it will not deal with third parties on claims of blocked funds and will not
entertain anyone claiming to be representatives of the claimants of blocked funds.

“Claimants are therefore advised to directly approach Treasury if there are any issues or
discrepancies requiring attention.

“This will assist in ensuring that all the claims are diligently settled in line with
Treasury’s Governance Charter,” said Mr Guvamatanga.

In terms of the Finance Act No 7 of 2021 a creditor means a legal person, or the person’s
successor in title, who, being a foreign counterparty, provided a loan or advance or goods
or services to a person resident in Zimbabwe and was entitled to such payment for goods
and services or dividend or return on investment in foreign currency, but where the
foreign currency could not be repatriated from Zimbabwe.

The approved claimants all submitted their claims by April 30, 2020, for validation by the
Reserve Bank of Zimbabwe, before Treasury was given the directive by Parliament to pay
out the money in the scheme that is being and has been implemented.-The Herald