THE Zimbabwean government has come under scrutiny over its handling of Treasury Bills (TBs), with allegations of misuse and corruption surrounding these debt securities.
TBs are short-term government debt instruments issued to raise funds for public spending, typically with maturities of 91, 182, or 365 days.
They are sold at a discount to their face value, and investors earn a return when the government repays the full face value at maturity.
The controversy surrounding TBs is not new, as the government has been accused of issuing these securities without parliamentary approval, often bypassing required oversight.
Investigative reports allege that politically connected individuals leveraged TBs to secure hard currency through premature redemption — profiting at the State’s expense — leading to a surge in domestic debt.
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In December 2024, it emerged that the government was having trouble honouring its obligations to banks once the TBs became due.
“This is the issue of Treasury Bills; we know that Treasury Bills are an instrument through which governments can go domestically to fund its projects,” banker and financial expert Tawanda Nyambirai said during a panellist discussion at last week’s Zimbabwe National Chamber of Commerce 2025 annual congress held in Victoria Falls.
“But we have had the situation where Treasury Bills come to maturity, and this has resulted in a situation where these bills are discounted at ridiculous rates, which itself also has an impact on the cost of funding, and this is a regulatory behaviour that completely erodes confidence in the regulator and in the financial services sector.
“The result is we now so fear the regulator because if we happen to hold their paper, they have so much discretion. The paper is no longer what it used to be. They promise to pay only a particular debt and a particular amount, but they can decide to ignore that promise and not others.”
He said these factors, put together, created an environment where the regulatory environment had become a graveyard of capital.
“Where the regulator has become the accuser, the judge, the executioner, and the undertaker,” Nyambirai continued.
However, the Reserve Bank of Zimbabwe (RBZ) has distanced itself from overseeing TBs.
“The RBZ is no longer going to deal with fiscal issues, as these will be dealt with by the Treasury, as they were all moved to that position. The Reserve Bank is only standing as a regulator,” RBZ deputy governor Innocent Matshe said.
“I want to be very clear that RBZ is no longer going to be involved in any kind of fiscal operation. Fiscal issues will be dealt with by the fiscal authority, not the central bank.
“You point out that these are legal debts, and everybody in this room should know that all of these legal debts were moved to the Treasury. The Reserve Bank has no use for these bills.”
The RBZ was using debt securities as part of quasi-fiscal activities before the Finance, Economic Development and Investment Promotion ministry stepped in, stopped these actions, and assumed all the debt.
“The Reserve Bank has always said this economy needs much more patient, affordable capital. But you see, I’m also a banker. We have also said that banks and financial institutions should try to get offshore lines of credit,” Matshe said.
“The time when the Reserve Bank is going to be dishing out money is gone . . . We need to go out there and do it ourselves.”
As of September 2024, TBs amounted to US$261 million, while Treasury Bonds totalled US$4,87 billion, according to Treasury.
