Wednesday, 28 September 2016


The Constitutional Court is today hearing an application by former Vice President Joice Mujuru in which she is seeking to have government barred from introducing bond notes which are due to start circulating at the end of next month.

Chief Justice Godfrey Chidyausiku granted Mujuru’s request for an urgent hearing of the application which she filed in August following a recent announcement by the Reserve Bank of Zimbabwe (RBZ) that the surrogate currency will be introduced at the end of October. 

Today’s hearing comes as the bond notes are causing anxiety among business with a Harare businessman — Frederick Mutanda  last week  filing another application challenging the procedure and legality of the bond notes — which RBZ governor John Mangudya has said won’t be force on anyone.

In her application seeking the declaration of the introduction of the bond notes as unconstitutional — which was filed through Hamunakwadi and Nyandoro Law Chambers — Mujuru cited President Robert Mugabe, Finance minister Patrick Chinamasa, the RBZ and its governor Mangudya, and attorney general Prince Machaya as respondents.

“Money is property and a bond note, not being money, can never substitute money. There is therefore an infringement of the right protected by Section 71(2) of the Constitution to the extent that holders of foreign currency will be forced to use or hold bond notes in the place of their money.

“Whatever the respondents may seek to say about the bond note, it is clearly a disguised Zimbabwean dollar that is being introduced through the back door.

“The law does not allow a back door approach. If they wish to re-introduce the Zimbabwean dollar they must follow the law and call it by name given its demonetisation.

“Just like the bearer cheques of the period before 2009, bond notes will not be worth the paper on which they will be printed, but will make the poor poorer as they will be made to lose the little valuable assets they have, such as livestock, to the privileged few who will be in possession of worthless bond notes,” Mujuru says in her application.

When the central bank responded to Mujuru’s lawsuit last month, it described her court application as both “premature and ill-founded”, adding, “Indeed bond notes, outside of a policy announced by Fourth respondent (RBZ), are still at planning stage”.

“At no point has the (Reserve Bank) stated that bond notes are bank notes or indeed currency as defined in our laws, in particular the (Reserve) Act and the Bank Use Promotion Act (chapter 24:24).

“The entirety of applicant’s (Mujuru) action is premised on bond notes constituting bank notes and, or currency when in fact there is absolutely no basis for reaching this conclusion,” Mangudya said then.

But two weeks ago, Mangudya appeared to have made a volte- face when he announced he was introducing the bond notes at the end of October.

“It is important to note that bond notes shall not be forced on people who do not like them. The bank is addressing the concerns by planning to introduce smaller denominations of bond notes of $2 and $5.

“In addition, the bank has proposed for the setting up of an independent board to have an oversight role on the issuance of bond notes in the economy.
“It is critical to emphasise that the introduction of bond notes does not mark the return of the Zimbabwe dollar through the back door,” he said.

“At the rate at which the country is exporting and based on statistics…, we anticipate that bond notes equivalent to around $75 million will be in the market by end of December 2016,” Mangudya said during the presentation of his Monetary Policy Statement.

The announcement of the bond notes has caused panic among Zimbabweans as it revived ugly memories of the 2007 and 2008 economic era which was marked by severe food shortages and hyperinflation.

Zimbabwe has for the past few months been reeling from severe cash shortages that analysts blame on gross mismanagement by the Zanu PF government and the country’s dying economy. daily news


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