AN 86-year-old pensioner is challenging the
constitutionality of the statutory instrument (SI) that converted United States
dollar balances to Real-Time Gross Settlement (RTGS) accounts, which resulted
in the devaluation of his savings and pension.
Duncan Hugh Cocksedge is among hundreds of thousands of
pensioners in Zimbabwe that have lost millions of dollars as their pensions and
savings have been eroded and they risk destitution.
Cocksedge, a structural and civil engineer and one of
Zimbabwe’s greatest sportsperson, has approached the courts to recover the
US$179 541,45 balance, which was in his CABS account as at December 5, 2016.
Some writers consider him to be the country’s greatest-ever
baseball player and he also played rugby, cricket and hockey. Cocksedge played
hockey and baseball for the national team in the 1950s and 1960s.
He also wants the Exchange Control Directive RT/120/2018 to
be declared null and void and set aside, arguing that it is grossly irrational
and unreasonable and that Section 22(1)(b), (d) and (e) of the Finance Act
Number 2 of 2019 be set aside.
In the application, CABS is the first respondent while the
Reserve Bank of Zimbabwe (RBZ) and Finance minister Mthuli Ncube are the second
and third respondents respectively.
“My case is simple. I deposited into the bank goats. I
expect to be paid my goats. The bank can’t give me cockroaches when I gave them
goats,” Cocksedge, who is being represented by prominent lawyer Tendai Biti,
said in the application.
“It is my respectful contention that section 22 (1)(b), (d)
and (e) are unconstitutional and are a breach of my right to property as
protected by section 71 of the Constitution of Zimbabwe. The net effect of
Section 22 is to devalue my US$ balances into a quasi-currency known as the
‘Real Time Gross Settlement’ which should then be negotiable on a willing
buyer-willing seller.”
“I am an 86-year-old man who was looking to those resources
for my retirement. The sum of US$179 000 would have looked after me very well.
The sum of less than US$2 000 equivalent cannot last me three months.”
He said there is nothing dignified about essentially
expropriating the savings of an 86-year-old pensioner who has toiled for the
money all his life with the intention of cushioning himself in his twilight
years.
The government introduced a basket of multi-currencies,
including the US dollar, as legal tender in 2009.
In May 2016, RBZ governor John Mangudya made a major policy
announcement indicating that the central bank would introduce an export
incentive in the form of bond notes.
Mangudya said the facility was backed by a US$200 million
fund.On October 31, 2016, through an extraordinary Government Gazette, the then
president Robert Mugabe enacted the Presidential Powers (Temporary Measures)
Amendment of the Reserve Bank Act on the Issue of Bond Notes Regulations of
2016, which were contained in SI 133 of 2016.
Cocksedge wrote a letter to CABS, asking the bank to
preserve his account and not to deposit any more funds into it.
“On the 2nd of June 2020, I wrote a letter of demand to the
first respondent (CABS) demanding payment of the said sum of US$179 541,45, but
the first respondent has failed or neglected to pay the same.
“I am advised, which advice I take, that on the 22nd of
February 2019 the President of the Republic of Zimbabwe enacted the
Presidential Powers (Temporary Measures) Act Amendment of the Reserve Bank of
Zimbabwe Act Regulations SI 33/2019. Further, I am advised that on the 24th of
June 2019 the 3rd respondent enacted the Reserve Bank of Zimbabwe Legal Tender
Regulations published as SI 142/2019,” Cocksedge said.
He said he also understood that in August last year the
Finance Act No 2 of 2019 was passed by parliament, which morphed and
incorporated the provisions of SI 33 of 2019 and SI 142 of 2019. And the net
effect of SI 33 of 2019 was — among other outcomes — to effectively convert all
US dollar balances that existed in Zimbabwe into local RTGS$ at the exchange
rate of 1:1.
“The Supreme Court has interpreted SI 33 of 2019 to mean
that all indebtedness must now be converted and payable in Zimbabwean dollars.
I am aware that through SI 142/2019, Zimbabwean dollar currency was restored as
a sole currency in Zimbabwe and the regime of multiple currency was
terminated,” Cocksedge said
“I am aware that the Finance Act No 2 of 2019, in Section
21 of the Act, amended Section 44C of the Reserve Bank Act to incorporate SI
33/2019 in making the current currency the RTGS legal tender. I am aware that
Section 23 of the Finance Act restates the fact of the Zimbabwean dollar being
the sole currency for legal tender with effect from the 24th of June 2019.
“However, Section 44C made it clear that funds that were
held in nostro foreign currency accounts would continue being designated in
such foreign currency accounts. Nostro foreign currency accounts were defined
to mean any foreign accounts designated in terms of the Exchange Control
Directive RT/120/2018 held with the financial institution,” he added.
Cocksedge says Exchange Control notice 120 of 2018, issued
by the RBZ to separate US dollar balances between those that were classified as
nostro foreign currency accounts (FCAs) and nostro RTGS was unlawful, grossly
unreasonable and irrational.
“Through the stroke of a pen, the 2nd respondent (RBZ) had
enacted a directive whose effect was to have retrospective application in
converting our US$ balances into nostro FCA. Respondents knew the impact of
their actions and deceptively strove to assure the market about the 1:1
‘Gedyegedye’ fiction,” he said.
“As I write this affidavit now, the parallel market
exchange rate between the US$ and the RTGS is 1:100. Which means that as of
today my US$179 000,00 is now effectively worth a mere US$1 790,00, according
to the respondents.
“The 3rd respondent (Ncube) himself, acknowledges the
erosion of workers’ salaries and savings and pensions, raising by 50% the
salaries of civil servants and directing that a US$75 payment would be made to
all civil servants in foreign currency nostro accounts. The 2nd and 3rd
respondent’s actions have thus contributed to a massive loss of value. They
cannot deny this catastrophe.”
Cocksedge said he has contributed a lot to the development
of Zimbabwe through his engineering works in the construction of major
buildings in Harare, including Bard House, Karigamombe Centre, CABS Millennium
Towers, Pegasus House, Harare International School, the European Union office
block as well as Chinhoyi Hospital, among others.
He also worked for the Ministry of Roads and was involved
in civil works on the Chinhoyi to Makuti road and the Bulawayo to Hwange road
and was involved in the design and construction of bridges on those roads.
Zimbabwe Independent
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