ED sued over RTGS currency

BY CHARLES LAITON

Harare businessman and University of Zimbabwe (UZ) lecturer, Shakespear Hamauswa, has petitioned the High Court seeking a court order to declare unconstitutional the Presidential (Temporary Measures) Act, which President Emmerson Mnangagwa evoked as legal basis to introduce the RTGS$.

Hamauswa also said he was seeking another court order declaring null and void the Presidential (Temporal Measures) Act, amendment of the Reserve Bank of Zimbabwe (RBZ) Act (SI33/2019), through which the RTGS$ was issued.

“In the regulations, gazetted on February 22, 2019, the first respondent (Mnangagwa) purported to amend section 44 of the RBZ Act, by addition of a new section 44 (c) that had the effect of the following; allowing and authorising the RBZ to use electronic cards, recognising that the RBZ had with effect from the effective date that is February 22, 2019 issued an electronic currency called RTGS$, that people’s existing balances in their banks held the RTGS system as well as bond notes and were now to constitute a new currency known as the RTGS,” Hamauswa said.

In his court application, Hamauswa cited, in their official capacities, Mnangagwa, Minister of Finance and Economic Development, Mthuli Ncube and RBZ governor John Mangudya as respondents.

“It is my respectful contention that the Act, that is the Presidential (Temporal Measures) Act, is unconstitutional. This Act gives the sweeping powers to the President of making laws virtually on every subject….what this means is that the President has sweeping powers to make laws that are above even laws that have been made by Parliament,” he said.

“For the purpose of this case, it is disheartening that the President has in fact amended the Act of Parliament; namely the RBZ Act. Surely that on its own is a breach of section 134 of the Constitution of Zimbabwe.

“The Presidential Powers (Temporal Measures) Act is ultra vires the Constitution. The subsidiary legislation envisaged in section 134 cannot be delegated to President whose functions are defined in section 110 alone and in any event, the President acting in terms of the Act or any other law, does not have the power to override Parliament, through a legislative amendment or the making of a law that overrides existing law. I thus seek declarations to this effect.”

The businessman said to buttress his statement of May 4, 2016, Mangudya, on May 5, 2016, issued ECOGAD8 of 2016 (exchange guidelines), which was revolving, adding by that date the RBZ knew it had a Ponzi currency called RTGS.

“It (RBZ) knew that people’s US$ balances accumulated from time of dollarisation in 2009 were no longer in existence. Quite clearly, we have been taken for a ride, the respondents through and among other things deficit financing exhausted our US$ balances. To monetise the “theft” the third respondent created the RTGS account and later bond note,” Hamauswa said.

“In fact, as ECOGAD8 shows, the RTGS$ has been with us since May 2016. That the first respondent (Mnangagwa) now calls it a RTGS$ does not detract from the fact that de facto, and despite the vigorous denials by the third respondent (RBZ) in many court actions brought before this court, the RTGS$ and the bond note were a currency.

“That currency had an exchange rate. So the creation of the RTGS$ was not a national urgency. Equally the partial floating of the action was also not urgent. This could have easily been done by an amendment of the exchange control regulations.”

The UZ lecturer further said indeed, one notes that in the same extra-ordinary government gazette, in respect of which the regulations were passed, Mnangagwa amended the Exchange Control Regulations of 1996 by Statutory Instrument 32, 2019.

“By issuing bond notes and RTGS currency at par with the US$ and then devaluing the same on February 20, 2019 the respondent has robbed us. Section 71 does not permit expropriation of people’s property,” he said.

“The net effect is that the third respondent and indeed the first respondent have devalued the RTGS$ balances by 2,5. The RTGS$ must, therefore, be set aside on the basis that it is an infringement of section 71 of the Constitution of Zimbabwe.” The matter is pending.

7 Comments

  1. How much money was stolen from this Professor?
    Please DONT mislead the Nation as if the RBZ stole money from anyone.
    How can the RBZ steal money from people who have NO money including this Prof.
    Just mind your business and dont try to be a hero lest the court are gona bill you a hefty penalty for bring a silly case to them.

    1. stop showing your ignorance to the whole world.

  2. The bond note and RTGS have always been local transactions which had nothing to do with foreign currency . Their value could have been held against the US$ just like any other currency the world over . You can not say when a currency loses or gains against the US$ , money in the bank should maintain the old value against the US$. For what benefit are you suing the president except just trying to throw spanners into the works ? You have overcharged people in your business and are now using that money to sue . If you got any good ideas , please use them to develop and not retard progress.

    1. Your logic is scary. What is the difference between currency and money in the bank? Didn’t RBZ maintain that bond note and USD were equivalent until recently? Note well, one currency may gain or lose value against another in economics through trade, but when someone just declares an arbitrary value for a currency not linked to market forces that is voodoo economics equating to daylight robbery. Some deposited real USD in their accounts as savings, and then suddenly are told their money is RTGS$ and worth a fraction of USD – if that makes sense to you then i don’t what planet you are from.

  3. good to at least have some checks and balances. its healthy for any institution, our country included. we will see however see how the case would go

  4. Tafadzwa Ralph Mugabe I

    Following…

  5. siyai aite its his democratic right

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