Sunday, 2 October 2016

BOND NOTES : MUJURU FIGHTS ON



The government’s quests to introduce the much-distrusted bond notes onto the market at the end of this month continue to face challenges, after former Vice President Joice Mujuru escalated her objections to the surrogate currency yesterday by asking the Reserve Bank of Zimbabwe (RBZ) to reveal the law it will use to back their introduction.

This follows Wednesday’s ruling by the Constitutional Court (Concourt) which said it was not going to deliberate on Mujuru’s application because it was both premature and speculative in the absence of a law governing the bond notes.

But Mujuru’s lawyers are not waiting for the surrogate currency to be introduced before she launches another court challenge. They are demanding to know in advance which law the central bank will use to introduce the bond notes.

In her letter addressed to President Robert Mugabe, Finance minister Patrick Chinamasa and RBZ governor John Mangudya, Mujuru also maintained that the introduction of bond notes would have grave consequences on her as an ordinary citizen.

“We have been instructed to advise you that our client remains very much opposed to the introduction of bond notes for the reasons clearly articulated in documents filed in court and which you are in possession of.

“In view of our client’s conviction that the introduction of bond notes will infringe her constitutional rights, our client is determined to protect her fundamental rights through legal machinery provided for that purpose by the Constitution,” Mujuru’s lawyer Gift Nyandoro said.

“If you still intend to introduce bond notes as aforesaid, what existing legal basis authorises you to issue them? If there is no existing legal basis, when will you be putting in place the relevant legislative instruments.

“If we do not hear from you by close of business on Wednesday 5th October 2016, we shall conclude . . . that you are proceeding with the introduction of bond notes . . . that you will do so without legal basis and that you have no regard for the fundamental rights of our client,” Nyandoro added.

On Wednesday the Concourt ruled that Mujuru’s request for her application to be heard was premature and speculative, since the bond notes were not yet in circulation.

Chief Justice Godfrey Chidyausiku said in order for a Concourt application to succeed, there had to be a law upon which the argument is based on, which clearly stated the rights that had been violated in terms of the supreme law of the land.

“After considering the papers filed in this matter and submissions by counsel, the court is satisfied that this application is premature and speculative. It is therefore dismissed with costs,” Chidyausiku said.

Presenting his monetary policy statement two weeks ago, Mangudya confirmed that the country would start using the bond notes this month — in a move that sent shivers down the spines of ordinary citizens who fear the return of the much-despised Zimbabwe dollar and the attendant hyper-inflation that was witnessed a decade ago.

This was despite the fact that the RBZ had in August appeared to indicate that it was having second thoughts about bringing the bond notes into circulation soon, while responding to Mujuru’s lawsuit — saying then that the surrogate currency was still at “a planning stage”.

“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.

“The macroeconomic fundamentals or conditions for the return of the local currency are not yet right to do so. The issuance of bond notes has a self-control mechanism in that when there are no exports there will be no bond notes.

“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 a fortnight ago.

His announcement has since attracted another lawsuit from Harare businessman Frederick Mutanda who is also challenging the procedure and legality of the bond notes.

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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