Doing the right thing, finally

via Doing the right thing, finally – The Zimbabwe Independent November 1, 2013

Government, through Finance minister Patrick Chinamasa, should be congratulated for taking responsibility for the thousands of companies which were prejudiced of more than US$540 million when the Reserve Bank of Zimbabwe (RBZ), under governor Gideon Gono, raided corporate foreign currency accounts (FCAs) in October 2007.

This is an issue that required the specific political resolve that the government took on Tuesday. From a legal standpoint the Supreme Court had ruled that banks themselves were obliged to re-imburse the companies not a third party, the RBZ.

Nevertheless, the banks were powerless in the face of the directive from the central bank to surrender monies in FCAs. Furthermore, neither the banks nor their clients could in the post-Zimbabwe dollar era effectively sue the RBZ for their losses, as the central bank enjoyed immunity through the State Liabilities Act.

Had government insisted that the banks had lost their case in the courts and therefore the case was closed, this wasn’t going to bring real closure to the matter.

Simply put, the nation was never going to have confidence in the local banking system, neither would foreign investors.

No one has confidence in a banking system that allows state arms to appropriate, at will, the hard-earned monies of corporates or individuals, then uses the law to protect themselves from compensating the affected.

Nevertheless, the statement of intent made by the authorities is not the be-all and end-all to the issue.

There needs to be an announcement of how and when the thousands of companies are going to be compensated. As it stands, there is no doubt many of them became casualties and have since fallen by the wayside. Others are teetering on the brink of collapse. Yet the mere fact that these companies had put close to half a billion dollars in their foreign accounts means they were the geese that laid the golden eggs. They were exporters and therefore earners of the much-needed foreign currency. When they were disemboweled by the RBZ, they were no longer able to perform their vital task.

Is it little wonder then that we complain of the general lack of value addition in the economy, which most of these affected companies did? Does it take knowledge of quantum physics to realise that it’s primarily because of this that our manufacturing sector is teetering? Are we surprised therefore that imported products from all over have found their eldorado in Zimbabwe, and hence our yawning trade deficit and precarious balance of payments position? These are the chickens coming home to roost from the ill-thought out actions of Gono six years ago. Thankfully, government has realised this and has made a commitment to this form of cleansing.

However, this is only the first step (and a major one at that) towards tackling all of the legacy issues from the hyperinflation years that need to be resolved. There are still issues concerning losses incurred by holders of pension funds and life assurance policies, as well as paid-up permanent shares in building societies.

An economy grows if it generates wealth and savings. All the above-mentioned are part of national wealth and savings that this country’s citizens need restored. Government has the unenviable task of addressing this.

 

COMMENTS

WORDPRESS: 8
  • comment-avatar
    Tjingababili 7 years ago

    THE DAMASCUS ROAD SAUL BECOMES PAUL, MAYBE!

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    Tony Pajamas 7 years ago

    Pay up you thieves……!!!,

  • comment-avatar

    Why is gono etc not doing hard Labour at chillers?

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    Zvapasipano 7 years ago

    Wish this can come true.i believe by seeing like Thomas

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    Jrr56 7 years ago

    Cheap talk does not equate to money in the bank.

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    Zvakwana 7 years ago

    Same with the farms.

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    Yes Sir Boss My ass 7 years ago

    A country is a region legally identified as a distinct entity in political geography. A country may be an independent sovereign state or one that is occupied by another state, as a non-sovereign or formerly sovereign political division, or a geographic region associated with sets of previously independent or differently associated peoples with distinct political characteristics. A resident of a country is subject to the independent exercise of legal jurisdiction. A republic is literally a form of government in which affairs of state are a “public matter” (Latin: res publica), not the private concern of the rulers, in which public offices are subsequently appointed or elected rather than privately accommodated (i.e., through inheritance or divine mandate). In modern times, the common definition of a republic is a government which excludes a monarch. Today the term republic still most commonly means a system of government which derives its power from the people rather than from another basis, such as heredity or divine right. This remains the primary definition of republic in most contexts.We saw Zimbabwe (formerly Rhodesia), which under white rule was so prosperous it was known as the “breadbasket of Africa,” hit rock bottom; and now this.

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    easily fooled 7 years ago

    This should have come during the campaign phase of the dramma. There were going to corporate and NGO voters of ZPF. Now its a little too late. What I am not sure of if whether the state will pay interest on this soft political administration loan (SPAL). History has it that Zimbabwe failed to pay WB, IMF, AfDB etc and will be able to pay a SPA Loan from its citizens. What a country? Gono get ready to issue TBs to raise money from the citizens to pay our citizens