Panicky depositors rush to withdraw money

Panicky depositors rushed to withdraw their money yesterday after government’s promulgation of Statutory Instrument (SI) 133 of 2016 to legalise the introduction of bond notes, with legal experts describing President Robert Mugabe’s move as unconstitutional.

Source: Panicky depositors rush to withdraw money – NewsDay Zimbabwe November 2, 2016

BY PAIDAMOYO MUZULU/REJOICE CHINGWARU

Mugabe on Monday gazetted SI 133 of 2016, Presidential Powers (Temporary Measures) (Amendment of Reserve Bank of Zimbabwe Act and Issue of Bond Notes) Regulations, that clears the hurdle for the introduction of the abhorred bond notes.

Many Zimbabweans say any local currency introduced at the moment induces in them fear of the 2008 hyperinflationary era that wiped out people’s life savings and pensions.

Lawyers, Tendai Biti and Lovemore Madhuku are preparing a legal application to challenge the legality of the SI, arguing it is unconstitutional.

Biti, a former Finance minister, said Mugabe’s move was illegal, adding the government had six months to introduce the law through Parliament, rather than use an unlawful Presidential decree, which could only be applied in cases of a state of emergency.

“The President is not Parliament and in a democracy, where there is separation of powers, one man cannot make the law,” he said.

“The first objection is the abuse of the Constitution and Parliament. Second challenge, the statutory instrument does not answer whether bond notes are money or a securitised instrument.”

Madhuku, a law lecturer at the University of Zimbabwe, said he will challenge the new regulations at the High Court today.

“This statutory instrument is null and void. It is being taken up and we are going to court to challenge it. It’s no longer lawful for a President to amend a law that comes from Parliament,” he said.

Madhuku said they would seek an interdict to stop the Reserve Bank of Zimbabwe from circulating the bond notes.

The lawyers cited section 134 of the Constitution that says Parliament’s primary lawmaking power must not be delegated.

Another lawyer, Tawanda Nyambirai, said Presidential powers should be used in emergencies only, not a situation that rose in May. He said Mugabe was curtailed by the new Constitution to amend a law made by Parliament.

“SI 133 has been issued under the Presidential Powers (Temporary Measures) Act [Chapter 10:20]. This Act empowers the President to make regulations to deal with a situation that has arisen, which needs to be dealt with urgently … in the economic interests of Zimbabwe or the general public interest,” Nyambirai said.

He said the matter should have been brought through the normal parliamentary route.

But Zanu PF central committee member and former Copac co-chairman, Paul Mangwana, said: “The Presidential Powers Act is still binding unless the Constitutional Court (ConCourt) strikes it off. The President can invoke the Act through a statutory instrument like what he did with the issue of bond notes.”

However, in a notice on Monday, Finance minister Patrick Chinamasa argued: “[The] Reserve Bank of Zimbabwe has power to issue bond notes in terms of the provisions of section 7 of the Reserve Bank of Zimbabwe Act (Chapter 22:15). The Export Incentive Scheme could also have been introduced through section 2 of the Exchange Control Act (Chapter 22:05), which empowers the President to make regulations relating directly or indirectly to exchange transactions and the control of imports into and exports from Zimbabwe, and payments.”

The ConCourt last month dismissed Zimbabwe People First leader, Joice Mujuru’s application challenging the introduction of bond notes, saying the action was premature.

Another similar High Court application by businessman Frederick Mutanda is still to be determined.