Friday, 21 October 2016

MUJURU, RBZ BOND NOTES TALKS COLLAPSE

Talks between former Vice President Joice Mujuru and the Reserve Bank of Zimbabwe (RBZ), which were meant to result in the Zimbabwe People First (ZPF) leader shelving her court action against the imminent introduction of bond notes, are dead in the water after the parties failed to reach agreement on Wednesday.

This comes as ordinary Zimbabweans, business, civil society and opposition parties have all said that they are opposed to the planned introduction of the much-distrusted surrogate currency next month.

Wednesday’s hush-hush meeting in Harare between Mujuru and the RBZ had been arranged by the under-pressure central bank to pave the way for the smooth roll-out of the
surrogate currency whose planned introduction has caused panic among many Zimbabweans.

Mujuru has said she wants to know which law the RBZ will use to back the introduction of the bond notes, which she argues, are illegal.
“We note that at the end of the meeting you confirmed that you are going ahead with the introduction of the bond notes on October 31st, 2016.

“We indicated to you that a Statutory Instrument is out of the question in such a critical issue … and we are instructed to advise that our client is convinced that your refusal to disclose the envisaged instrument is sufficient evidence that the introduction of bond notes will infringe her constitutional rights,” Mujuru’s lawyer Gift Nyandoro, who accompanied the ZPF leader to the RBZ on Wednesday, said in a letter to the central bank yesterday.

“It is most likely that you will proceed without any lawful basis as you did with bond coins, as there is no way an Act of Parliament can be lawfully enacted between now and 31st October 2016.

“Alternatively, you will proceed by way of a Statutory Instrument. As aforesaid, this is unlawful in itself. Unless we hear from you regarding the nature of the envisaged framework for the bond notes by close of business on Monday October 24, 2016, our client’s assumptions in our letter of September 29, 2016 will remain and we shall have no option but to return to the court with an appropriate application,” he added.

This came after Mujuru filed a lawsuit against the RBZ, President Robert Mugabe and the government at the Constitutional Court imploring the apex court to declare the introduction of the bond notes unconstitutional.

However, the ConCourt, said it was not going to deliberate on her application because it was both premature and speculative in the absence of a law governing the bond notes, prompting her to demand from the RBZ the nature of the legal instrument it was going to use in backing the proposed currency.

Efforts by the Daily News yesterday to get comment from RBZ governor John Mangudya and his deputy Khupukile Mlambo did not bear fruit.

But Vice President Emmerson Mnangagwa recently told Parliament that the government would soon craft an enabling law to back the bond notes.

“It is (bringing bond notes) going to be reality. We are going to live with it ... We are in the middle of crafting legislation to introduce the bond notes,” Mnangagwa said during a luncheon at the official opening of the current Parliamentary session.

However, economists and legal experts say the delays in crafting the law could be the reason why the RBZ has postponed the launch of the bond notes from the end of this month to early November at the earliest. On its part, the central bank has said it will be introducing bond notes worth $75 million next month, in a move aimed at providing incentives for exporters and easing the country’s severe cash shortages.

But as the Zim economy continues to die, opposition to the introduction of the bond notes has been increasing, with the business community, MPs, church leaders and ordinary citizens expressing their displeasure at the surrogate currency.

In its contribution to ideas for the 2017 national budget, the influential Confederation of Zimbabwe Industries (CZI) revealed that its members had rejected the surrogate currency in toto  instead advocating for the greater use of the South African rand.

“The announcement of bond notes has caused widespread panic ... While the bond notes make sense as a technical solution we have completely failed to sell the concept to our members.

“Confidence is too low for the introduction of the bond notes in the meantime and we therefore recommend the cancellation of the plan and have them replaced with the rand. 

“We also suggest that the minister of Finance starts presenting his budget in rand instead of United States dollars ... Business will encourage its members to use Rand,” CZI vice president Sifelani Jabangwe said.

The Zimbabwe Revenue Authority (Zimra) has also warned that bond notes will further destabilise the country’s battered economy.

“The advent of the bond notes has brought some uncertainty into the economy, and this is exacerbating the existing liquidity challenges because everyone wants to keep their US dollar cash. There is a serious confidence issue on this matter,” said Zimra board chairperson Willia Bonyongwe.

The pending introduction of the bond notes has caused panic among ordinary Zimbabweans and traders alike, who have been swamping banks in a bid to withdraw their savings. Daily news

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