Mugabe boob: Bond notes taken to Parly

Mugabe boob: Bond notes taken to Parly

by: Staff Reporter

Published On: Friday, November 18, 2016 3:36 PM GMT

PRESIDENT Robert Mugabe’s government has, through the finance ministry, drafted a Bill to amend the Reserve Bank of Zimbabwe Act to pave way for the imminent introduction of bond notes.

The government made its intention known through an Extraordinary Government Gazette issued 16 November this year.

Last month, Mugabe invoked the Presidential Powers (Temporary Measures) Act to amend the Reserve Bank of Zimbabwe Act to designate bond notes as legal tender but lawyers have said the use of presidential powers was unconstitutional.

Finance minister Patrick Chinamasa insisted that Mugabe had acted legally but the latest change of tack suggests the administration may not be that certain.

The Bill further seeks to validate government’s issuance of bond coins which have been in circulation for nearly two years now.

“This Bill will amend the Reserve Bank of Zimbabwe Act (Chapter 22:15) (No. 5 of 1999) to enable the Reserve Bank, with the leave of the Minister responsible for finance to issue “bond notes” exchangeable at par with the United States dollar on the same basis that it previously issued bond coins.

“At the same time, the opportunity is taken to validate the issuance of bond coins currently in circulation, ‘for the avoidance of doubt’,” reads the Government Gazette in part.

Anger over bond notes

The imposition of bond notes which government says shall be used in tandem with the current multi-currency regime has been met with spirited resistance from a cross section of Zimbabweans who fear a return to the 2008 hyper inflationary period when savings were lost while locked up in bank accounts.

After civic groups and opposition parties have in the past weeks approached the courts to challenge the introduction of the dreaded currency, President Mugabe last month invoked the Presidential Powers (Temporary Measures) Act Amendment of the Reserve bank of Zimbabwe Act and Issue of Bond Notes Regulations 2016 which were contained in Statutory Instrument 133/2016.

Legislative watchdog, Veritas was quick to raise the red flag, insisting the measures were only valid for 180 days, making the currency illegal after three months.

The Zimbabwe Lawyers for Human Rights this week filed a High Court challenge seeking to invalidate the alleged abuse of the Presidential powers which they said could only be activated during an emergency when time is not enough for Parliament to pass an Act dealing with issues arising.

However, the RBZ Amendment Bill seeks, instead, to arm the country’s finance minister with the requisite powers to issue a statutory instrument ordering the use of bond notes and any other form of legal tender.

Zim-dollar return worries

“This clause (clause 4) will statutize the provision of the issuance of bond notes temporarily enacted by the presidential powers (Temporary Measures) (Amendment of the Reserve Bank of Zimbabwe Act and Issue Bond Notes) Regulations, 2016.

“It will also validate the issuance of bond coins in circulation before that time,” the Bill reads in part.

Legal experts say it was almost apparent government sought to rush the Bill through parliament in time for the issuance of the much dreaded currency which the government wants to introduce in less than a month.

Zimbabweans loath the introduction of what they view as a backdoor attempt by their government to reintroduce the long discarded Zim-dollar.

Authorities say they will not saturate the market with anything in excess of the planned $200m export incentive facility which they say was guaranteed by a foreign bank.

But critics say the introduction of notes whose production would be at the discretion of the current government could easily tempt the cash strapped administration to abuse it as it struggles to raise monthly wages for civil servants.

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