Mnangagwa sued over US dollar conversion

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President Emmerson Mnangagwa

BY CHARLES LAITON

THE Law Society of Zimbabwe (LSZ) has taken President Emmerson Mnangagwa to court, challenging his 2019 presidential decree which introduced the real-time gross settlement (RTGS) dollars and compulsorily converted depositors’ United States dollar balances into local currency.

In its application, the LSZ cited Finance minister Mthuli Ncube, Reserve Bank of Zimbabwe (RBZ) governor John Mangudya, Mnangagwa and Attorney-General Prince Machaya, as co-respondents.

In his founding affidavit, LSZ executive secretary Edward Mapara said Mnangagwa’s promulgation of the Presidential Powers (Temporary Measures) Amendment of the RBZ Act, had effectively resulted in his organisation incurring huge losses, adding that the move by the Head of State was contrary to the country’s Constitution.

According to Mapara, sometime in February 2009, the government introduced the multi-currency system in terms of which the US dollar was accepted as legal tender alongside other currencies. He said the introduction of the multi-currency system was regularised and given legal effect by way of Section 17 of the Finance (No 2) Act, 2009.

“Consequent to the introduction of the US dollar, Zimbabwean citizens, including the applicant, were allowed to open and operate US dollar accounts for purposes of transacting in such currency,” Mapara said.

“In terms of section 71(2) of the Constitution, every person has the right, in any part of Zimbabwe, to acquire, hold, occupy, use, transfer, hypothecate, lease or dispose of all forms property, either individually or in association with others.

“The applicant was entitled to hold the funds in the bank accounts in terms of the provisions of section 70(2), such funds being property as envisaged in the Constitution. The US dollar obligations owed to the applicant by its members and members of public constitute assets as envisaged in section 70 of the Constitution.”

He said in devaluing the bank balances in his organisation’s FCA accounts and further compulsorily converting the US dollar-denominated assets into RTGS dollar assets, the State presided over the compulsory deprivation of his organisation’s right to the US dollar balances and assets affected by the RTGS dollar regulations.

The compulsory conversion of his organisation’s US dollar-denominated assets and bank balances, Mapara said, done in terms of Statutory Instrument 33 of 2019, did not serve any public interests.

3 COMMENTS

  1. I support the president on this one. The majority of employees were no longer
    getting their salaries and wages on time during that period. Also the level of
    indebtness was out of this world for the majority of citizens. And the interest
    rate on loans was too high and unsustainable for companies as well as individuals.
    I wholeheartedly support his excellence president ED Mnangagwa on his wisdom in
    liberating the ordinary citizens from the cruel banks and money lending institutions
    as well from profiteering retail outlets and the rest of the unscrupulous businessies. Everyone has now learnt a lesson. We should desist from being greedy. Such behaviour is not good for our economy. during the usd era we had managers in
    local authorities earning as much as $37000-00 USD per month whilst the lowest earned a paltry $250-00 USD per month imagine. Now is the time to redollarise but with a sense of responsibility.

    • This was the root cause of skyrocket inflation. To be honest our national economy was not yet strong enough to take the dollarisation route. It was a move that further enriched the rich at the same time enpooring the already poor. Those who had monies in their accounts charged in US$ ended up getting peanuts that buy nothing. I am of the opinion that speculation and perusal of the idea before adopting it was very fair but not blaming the government

    • and now civil servants are getting their peanuts on time…hooray. This is not about the US$ or Z$ but its about proper policies in place. Since we de-dollarised and re-dollarised in some sectors of the economy, the Z$ is nowhere to be found. The honest truth is that any benefits of de-dollarising have been imaginary except to those who owed US$.

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