Former Finance minister Tendai Biti has said only an Act of Parliament and Statutory Instrument have legal effect, rubbishing an exchange control directive which was used to cobble a list of companies and individuals that had stashed money outside Zimbabwe.
BY TATIRA ZWINOIRA
“An exchange control directive, as its name implies, is a directive by the regulator over the procedural transactional use of currency of imports or exports, the issues of CD 1 or 2 (export documentation) you will not find them in an act, in a law. A law is defined to be an Act of Parliament or a Statutory Instrument you find it in directives issued by the central bank,” Biti said at a meeting in Harare yesterday.
Biti was responding to Finance and Economic Development deputy minister Terence Mukupe, who had said the externalisation list was based on a 2016 Reserve Bank of Zimbabwe directive, Exchange Control Operational Guidelines and Compliance Framework to Authorised Dealers (ECOGCFAD).
Mukupe said central bank governor John Mangudya had put the ECOGCFAD to prevent the free flow of money out of the country.
“When we had the Zimbabwean dollar, it was clear what was a foreign currency account (FCA) and local account were, it was clear in terms the rules that governed what you could do with funds that were in an FCA account, it was clear what it is that was called free funds. The only thing that was called free funds during the Zimbabwe dollars was when a foreigner brought in money and put into that FCA they were free funds you could do what you wanted with that money because it was your money,” he said.
Mukupe said Mangudya came up with regulations that govern and define what free funds are.
He said Zimbabwe lost money in the period between 2009 and February 2016.
Before the release of that list, debate over the legality of the document was put into question.
Legal practitioners argued that due to the nature of the current exchange controls and Statutory Instruments in place, individuals and firms could not be accused of externalising.
Biti said the highest number of directives from RBZ were in the period 2004 to 2008, where it was issuing out directives every three months.
“So, the directive is not a law, the directive is a transactional document indicating that you move from point A to point B which you cannot do in a statutory instrument which becomes a Bible, which you cannot do in an Act of Parliament,” Biti said.