Fresh challenge to RBZ bond notes

By Fungi Kwaramba

Anti-President Robert Mugabe pressure group, Tajamuka, is set to petition the Constitutional Court (Con-Court) to halt the Reserve Bank of Zimbabwe (RBZ) from introducing bond notes, arguing there is no legal framework that supports the surrogate currency.

This comes as last month, the Con-Court ruled that former vice president Joice Mujuru — who had also challenged the currency’s introduction — would have to wait until the notes’ introduction, for her to contest their legality.

Citing section 317 of the RBZ Act, Tajamuka spokesperson Promise Mkwananzi said the central bank’s role is “to protect the currency of Zimbabwe in the interest of balanced and sustainable economic growth”, adding that introduction of the bond notes would make such a thing impossible to achieve.

“The government and RBZ must provide a detailed account of changes and policies that will provide infrastructure to sustain economic growth and sustain value of bond notes at the proposed rate of one-to-one to the United States (US) dollar,” reads part of the petition.

“…Mugabe and the Zanu PF government have presided over a central bank system that has created instability in the monetary and economic welfare of Zimbabwe,” the group said in the petition, adding that “Finance minister Patrick Chinamasa and RBZ governor John Mangudya have been delinquent in their administration of…fiscal and monetary affairs”.

“Mugabe’s government… has presided over a central bank which has depleted local foreign exchange reserves and can no longer support the purchase of adequate volumes of US dollars to meet local demand,” it further said.

Last week, Vice President Emmerson Mnangagwa said government was in the process of crafting legislation to back the bond notes, which he said will soon be a reality.

MDC spokesperson Obert Gutu — a lawyer by profession — said even if a law backing the bond notes was introduced, it was unlikely to be constitutional.

“There’s a lot of legal ambiguity and financial imprecision regarding the introduction of bond notes,” he said.

“The first legal hurdle that has to be cleared is to ascertain whether or not bond notes can be classified as money in terms of both the Banking Act and the RBZ Act. What exactly are bond notes? Are they financial legal tender and if so, on what basis?”

Experts say government will have to either promulgate a Statutory Instrument in the gazette — which is the fastest way of doing it — or come up with a brand new Bill in Parliament.

They also say government may even amend the Banking and RBZ Acts, which is the longer route.

In the petition, Tajamuka claims the introduction of bond notes is designed to cushion an overspending government and says if the plan goes ahead, then Mugabe, Chinamasa and Mangudya must “resign and face criminal action in the event that their unlawful and unconstitutional issuance of bond notes results in citizens losing their monies and the downward spiral of the Zimbabwe economy”.

Introduction of the bond notes come as Zimbabweans are still traumatised by bearer cheques, which were introduced after the Zimbabwe dollar was ravaged by unprecedented inflation.

“The government and RBZ must provide the citizens of Zimbabwe with a detailed account demonstrating how they are meeting the lawful and constitutional requirements to issue bond Notes,” Mkwananzi said in the petition. Daily News