The governor of the Reserve Bank of Zimbabwe (RBZ), Dr John Mangudya has said he is clueless on how to pay $389 million due to farmers as they are financially excluded.
Mangudya said the concerned farmers do not have either bank or mobile money details making it difficult to pay them since payments need to be done within the financial system in line with money laundering regulations.
He said the preferred solution was for the financially excluded farmers to open low-cost bank accounts, which can be done easily, as the RBZ has ruled out printing cash for the payments.
Mangudya told the Parliamentary Portfolio Committee on Lands and Agriculture on Thursday that the farmers would be paid, but there were challenges with the unbanked lot.
The committee, chaired by Gokwe Nembudziya legislator Justice Mayor Wadyajena (Zanu PF), wanted an update on the settlement of $1.5 billion owed to farmers for cotton delivered last season.
Mangudya said the schedule from Cottco showed that $436.6 million ought to be paid through mobile banking platforms while $66.6 million was for those with bank accounts and $389.5 had no banking details.
The RBZ will start payments Friday for the $66 million for those with banking details while pursuing solutions on how to settle payments for those without bank accounts. Mangudya said:
_In this day and age, we definitely need banking details. How do we validate that? The question is, is the money going to people who are known or unknown because a list of names will always be a list?__We are not comfortable as a bank to hear that in this country, there are people with no bank accounts. We spoke to six banks last year who were able and willing to open low-cost accounts. One of our jobs is to have financial inclusion so that all producers are included, to bank theunbanked.__In terms of accountability and transparency, it is not good. We need to have a spirit of Zimbabwean farmers to have bank accounts for traceability. This is the reason why $1,5 billion was taking long to be settled. How can it be released when we do not know where it is going? My job is to protect the Government coffers at all costs. If we had all the banking details, the money would have been released. One day I will be called by the Public Accounts Committee to explain where the money would have gone._
In response, Cottco managing director Mr Pious Manamike said farmers resisted having bank accounts citing concern over the withdrawal limit and the distance they have to walk to nearest financial institutions, while others stay in areas with no mobile network for them to use mobile banking platforms, among others.
- Farmers Urged To Register Farms With Mines Ministry To Avoid Conflicts
- Cotton Farmers Owed $1.5 Billion From Last Year’s Deliveries
- Chamisa Suffers Huge Financial Blow
- Matemadanda Calls For War Vets’ Financial Inclusion In Mainstream Economy – 2018