The government’s decision to reintroduce the local currency
faces a serious test after a third person filed a High Court application
challenging President Emmerson Mnangagwa’s use of presidential powers to ban
the multi-currency regime.
On June 24, the government renamed the RTGS dollar the
Zimbabwe dollar and declared it as the sole legal tender to end a decade of
dollarisation.
An opposition leader, Joseph Busha, and a human rights
lawyer, Godfrey Mupanga, approached the High Court challenging the use of the
Presidential Powers
(Temporary Measures) to issue the currency decree soon
after the move was announced.
They have since been joined by prominent lawyer and
businessman Tawanda Nyambirai, who accused the government of “governing the
country by decree”.
Nyambirai is seeking a court order to stop Finance minister
Mthuli Ncube and Reserve Bank of Zimbabwe governor John Mangudya from
introducing any policies, regulations or decisions that may affect the value of
the foreign currencies held by banks before June 24.
He argued that he was representing his own interests and
account holders who held foreign currency when Statutory Instrument (SI) 142 of
2019 was gazetted.
Nyambirai accused Ncube and Mangudya of “churning out
half-baked statutory instruments”.
He said the two “have themselves become the executive,
Parliament and the public in these matters”.
Nyambirai wants the court to compel all the banks in
Zimbabwe to preserve the records of the RTGS balances held by account holders
before June 24.
“As holders of RTGS balances that were converted to RTGS
dollars, we are the public, we are being deprived!
“We are aggrieved by the deprivation. In a democracy, such
far-reaching laws are supposed to be taken to Parliament at least, or be
subjected to a referendum,”
he said in his founding affidavit,” he said.
“The rate at which the first and second respondents (Ncube
and Mangudya) are churning out half-baked statutory instruments gives me the
feeling that the first
and second respondents are now ruling us by decree.
“They have themselves become the executive, Parliament and
the public in these matters.”
He said the fiscal reforms could not be said to be in the
public interest.
“Although it may be said to be in the public interest to
reduce the domestic debt that was going to result from the payment of
compensation on the conversion
of RTGS balances and bond notes and coins to RTGS dollar,
it is undemocratic and unfair to simply avoid domestic debt by impoverishing
the very public that
first and second respondents are supposed to serve,” he
argued.
“There are other options available to the first and second
respondents to reduce domestic debts. Such options include, among others, reducing
government
expenditure, eliminating corruption, stimulating
productivity through lowering taxes and thus boosting consumer purchasing power
and spend.”
Nyambirai is also challenging section 44C of the RBZ Act,
which he said violated the constitution.
“I also contend that the following restrictions imposed by
the second respondent’s Exchange Control Directive RU102/2019 dated June 25,
2019 constitute a
compulsory deprivation of property in contravention of
section 71(3) of the constitution of Zimbabwe and must therefore be nullified,”
he said.
The businessman argued that the new measures were
discriminatory because they gave the nod to airlines to continue charging in
foreign currency.
“SI 142 allows the use of foreign currencies in Zimbabwe to
pay some duties and to pay for international airline services,” he argued.
“The discriminatory treatment of these services
disqualifies SI 142 as a law of general application.”
Meanwhile, the Law Society of Zimbabwe (LSZ) has also
weighed in saying the banning of the use of foreign currency violated the law.
“It must be noted that while section 44A provides for the
designation of other currencies to be legal tender in Zimbabwe, it does not
expressly provide for the
inverse process; that is the revocation of the designation
of a currency other than the Zimbabwean dollar,” the lawyers said in a
statement.
“The minister acted beyond the powers conferred on him by
the Act and so for that reason SI 142 should be considered ultra vires the
enabling Act.
“Our view is further supported by the fact that section 17
of the Finance (No.2) Act No. 5 of 2009, which introduced the multi-currencies
through section 44A
(2), remains extant in our statute books.
“This section has not been repealed. The section cannot be
repealed by inference.
“The Act has to be properly amended by the legislature and
not by the minister.”
Veritas, a legal think-tank, also argues that the
government cannot ban the use of foreign currency in local transactions.
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