HomeLocalFresh Zimdollar headache for govt

Fresh Zimdollar headache for govt


The government’s decision to reintroduce the local currency faces a serious test after a third person filed a High Court application challenging President Emmerson Mnangagwa’s use of presidential powers to ban the multi-currency regime.

On June 24, the government renamed the RTGS dollar the Zimbabwe dollar and declared it as the sole legal tender to end a decade of dollarisation.

An opposition leader, Joseph Busha, and a human rights lawyer, Godfrey Mupanga, approached the High Court challenging the use of the Presidential Powers
(Temporary Measures) to issue the currency decree soon after the move was announced.

They have since been joined by prominent lawyer and businessman Tawanda Nyambirai, who accused the government of “governing the country by decree”.

Nyambirai is seeking a court order to stop Finance minister Mthuli Ncube and Reserve Bank of Zimbabwe governor John Mangudya from introducing any policies, regulations or decisions that may affect the value of the foreign currencies held by banks before June 24.

He argued that he was representing his own interests and account holders who held foreign currency when Statutory Instrument (SI) 142 of 2019 was gazetted.

Nyambirai accused Ncube and Mangudya of “churning out half-baked statutory instruments”.

He said the two “have themselves become the executive, Parliament and the public in these matters”.

Nyambirai wants the court to compel all the banks in Zimbabwe to preserve the records of the RTGS balances held by account holders before June 24.

“As holders of RTGS balances that were converted to RTGS dollars, we are the public, we are being deprived!

“We are aggrieved by the deprivation. In a democracy, such far-reaching laws are supposed to be taken to Parliament at least, or be subjected to a referendum,”
he said in his founding affidavit,” he said.

“The rate at which the first and second respondents (Ncube and Mangudya) are churning out half-baked statutory instruments gives me the feeling that the first
and second respondents are now ruling us by decree.

“They have themselves become the executive, Parliament and the public in these matters.”
He said the fiscal reforms could not be said to be in the public interest.

“Although it may be said to be in the public interest to reduce the domestic debt that was going to result from the payment of compensation on the conversion
of RTGS balances and bond notes and coins to RTGS dollar, it is undemocratic and unfair to simply avoid domestic debt by impoverishing the very public that
first and second respondents are supposed to serve,” he argued.

“There are other options available to the first and second respondents to reduce domestic debts. Such options include, among others, reducing government
expenditure, eliminating corruption, stimulating productivity through lowering taxes and thus boosting consumer purchasing power and spend.”

Nyambirai is also challenging section 44C of the RBZ Act, which he said violated the constitution.

“I also contend that the following restrictions imposed by the second respondent’s Exchange Control Directive RU102/2019 dated June 25, 2019 constitute a
compulsory deprivation of property in contravention of section 71(3) of the constitution of Zimbabwe and must therefore be nullified,” he said.

The businessman argued that the new measures were discriminatory because they gave the nod to airlines to continue charging in foreign currency.

“SI 142 allows the use of foreign currencies in Zimbabwe to pay some duties and to pay for international airline services,” he argued.

“The discriminatory treatment of these services disqualifies SI 142 as a law of general application.”

Meanwhile, the Law Society of Zimbabwe (LSZ) has also weighed in saying the banning of the use of foreign currency violated the law.

“It must be noted that while section 44A provides for the designation of other currencies to be legal tender in Zimbabwe, it does not expressly provide for the
inverse process; that is the revocation of the designation of a currency other than the Zimbabwean dollar,” the lawyers said in a statement.

“The minister acted beyond the powers conferred on him by the Act and so for that reason SI 142 should be considered ultra vires the enabling Act.

“Our view is further supported by the fact that section 17 of the Finance (No.2) Act No. 5 of 2009, which introduced the multi-currencies through section 44A
(2), remains extant in our statute books.

“This section has not been repealed. The section cannot be repealed by inference.

“The Act has to be properly amended by the legislature and not by the minister.”

Veritas, a legal think-tank, also argues that the government cannot ban the use of foreign currency in local transactions.

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