Zimbabwe will only introduce bond notes into the economy when the central bank is satisfied with levels of public awareness of the new currency’s features, Finance Minister Patrick Chinamasa has said, adding to the uncertainty surrounding the currency.
On Monday President Robert Mugabe used the Presidential Powers (Temporary Measures) Act to amend the Reserve Bank of Zimbabwe Act to designate the bond notes as legal tender, effectively launching the new currency, which government hopes will ease a biting US dollar bank note shortage.
The currency move has, however, raised fears of a return to a domestic currency abandoned in 2009.
The proclamation meant that government side-stepped Parliament — which would have had to clear the legislation — despite his Zanu-PF party having a two thirds majority.
But Mugabe’s regulations will last for six months, after which Parliament has to ratify or reject them.
Legal experts have questioned the constitutionality of Mugabe’s use of a presidential decree to launch the currency.
“The Presidential Powers (Temporary Measures) Act is patently unconstitutional,” said Alex Magaisa, a lawyer on his Twitter account.
“You can’t amend primary legislation using secondary legislation. The constitution specifically prohibits it. Section 134 of the Constitution makes it clear that making primary legislation is a job for Parliament only.”
Another legal expert, Brian Kagoro agrees.
“In reality the Presidential Powers Temporary measures are an unconstitutional instrument for introducing bond notes,” he said on his Twitter account.
“To use Presidential Powers Temporary measures willy nilly is to usurp the legislative function of parliament.”
A bond note unit will trade at par with one US dollar, according to a government notice issued late Monday. The notice did not say when the notes will be brought into circulation.
“When the Reserve Bank of Zimbabwe is satisfied that the public is sufficiently conversant with the salient features of the Bond Notes, it will proceed to issue the Bond Notes accordingly in line with the Export Incentive Scheme,” said Chinamasa in a statement released along with the government notice announcing the bond notes as legal tender.
The scheme, added Chinamasa, will “remedy the decline of (foreign currency) reserves which has a negative impact on the country’s ability to make prompt settlements of its international obligations.”
Central bank spokesperson, Isaac Muzambi told The Source on Tuesday that governor, John Mangudya had set a timetable for the release of the bond notes.
“I think the governor has a date and will announce it in due course,” he said.
“We would want more people at least to have basic information about the bond notes. So the publicity campaign is going to cover that and also the statutory instrument gives us the legal basis to do that.” Financial Gazette
