Mujuru fights to stop bond notes

HARARE - Former Vice President Joice Mujuru has ramped up her bid to stop the Reserve Bank of Zimbabwe (RBZ) from introducing bond notes — the country’s proposed surrogate currency — next month, as pressure continues to mount on President Robert Mugabe’s embattled government to turn around the dying local economy.

Mujuru’s lawyer Gift Nyandoro wrote to the Constitutional Court (Con-Court) on Friday asking the highest court in the land to treat her recent legal action against the notes with urgency, following last week’s announcement by RBZ governor John Mangudya that the central bank would be unveiling $75 million worth of the surrogate currency at the end of October.

“It is our client’s considered view that her application is most likely to be overtaken by events should it not be dealt with urgently, given the conduct of respondents regarding the introduction of bond notes. We therefore ask your office to have this letter placed before the chief justice.

“We write this letter pursuant to the correspondence we received from your office to the effect that the file of the above referred matter has been placed before the chief justice and that your office is still waiting for further directions.

“Our client is, however, worried by recent developments; in that the governor of the Reserve Bank of Zimbabwe, who is also a respondent in this matter, has since made it clear that bond notes will be released into the economy at the end of October 2016,” Nyandoro said.

“The governor pronounced this position during his 2016 mid-term monetary policy statement . . . The governor has gone to the extent of making indications of wanting to introduce smaller denominations of bond notes of $2 and $5,” he added.

In its prompt response to Nyandoro, the Con-Court said it was awaiting instructions from Chief Justice Godfrey Chidyausiku, to give direction as to how the matter would proceed.

This follows the confirmation last Thursday by Mangudya that the country would start using the much-distrusted bond notes next month — in a move that sent shivers down the spines of ordinary citizens who fear the return of the despised Zimbabwe dollar and the attendant hyperinflation that was witnessed a decade ago.

The central bank’s announcement caught most analysts by surprise given the dire state of the economy, the ongoing protests against the surrogate currency, the slap down that Finance minister Patrick Chinamasa had received from Mugabe over his unavoidable cost-cutting measures he had announced in his mid-term fiscal statement review, as well as Mujuru’s court challenge.

This was also especially so after the RBZ had last month appeared to indicate that it was having second thoughts about bringing the bond notes into circulation while responding to Mujuru’s lawsuit — saying then that the surrogate currency was still at “a planning stage”.

But presenting his monetary policy statement last week, Mangudya said the central bank would be introducing the bond notes at the end of October.

“It is important to note that bond notes shall not be forced on people who do not like them. The bank is addressing the concerns by planning to introduce smaller denominations of bond notes of $2 and $5.

“In addition, the bank has proposed for the setting up of an independent board to have an oversight role on the issuance of bond notes in the economy. It is critical to emphasise that the introduction of bond notes does not mark the return of the Zimbabwe dollar through the back door,” he said.

“The macroeconomic fundamentals or conditions for the return of the local currency are not yet right to do so. The issuance of bond notes has a self-control mechanism in that when there are no exports, there will be no bond notes.

“At the rate at which the country is exporting and based on statistics…, we anticipate that bond notes equivalent to around $75 million will be in the market by end of December 2016,” Mangudya added.

When the central bank responded to Mujuru’s lawsuit last month, it described her court application as both “premature and ill-founded”, adding, “Indeed bond notes, outside of a policy announced by Fourth respondent (RBZ), are still at planning stage”.

“At no point has the (Reserve Bank) stated that bond notes are bank notes or indeed currency as defined in our laws, in particular the (Reserve) Act and the Bank Use Promotion Act (chapter 24:24).

“The entirety of applicant’s (Mujuru) action is premised on bond notes constituting bank notes and, or currency when in fact there is absolutely no basis for reaching this conclusion,” Mangudya said then.

But Mujuru, who was sacked from both Zanu PF and government over untested allegations of trying to oust and assassinate Mugabe, wants the Constitutional Court to hear her matter as a matter of urgency, now that the RBZ has made a definitive decision on the introduction of the bond notes.

In her application, Mujuru argues that bond notes are not provided for under the RBZ Act, adding that despite them being said to have the same value as the United States dollar, they were bound to depreciate in value in no time.

“Money is property and a bond note, not being money, can never substitute money. There is therefore an infringement of the right protected by Section 71(2) of the Constitution to the extent that holders of foreign currency will be forced to use or hold bond notes in the place of their money.

“Whatever the respondents may seek to say about the bond note, it is clearly a disguised Zimbabwean dollar that is being introduced through the back door.

“The law does not allow a back door approach. If they wish to re-introduce the Zimbabwean dollar they must follow the law and call it by name given its demonetisation.

“Just like the bearer cheques of the period before 2009, bond notes will not be worth the paper on which they will be printed, but will make the poor poorer as they will be made to lose the little valuable assets they have, such as livestock, to the privileged few who will be in possession of worthless bond notes,” Mujuru says in her application.

The fears of the country receding into the hyperinflationary era of 2008 were heightened last Tuesday by Mugabe’s much-criticised decision to reverse the belt-tightening measures which Chinamasa had announced during his mid-term fiscal policy review statement — doing so without offering any viable alternative measures of his own.

Economists said his decision had dented confidence and the credibility of both fiscal and monetary policy in the country — including the announcement of the introduction of bond notes by Mangudya.

The increasingly frail nonagenarian, the only leader Zimbabweans have known since the country gained its independence from Britain in April 1980, is facing the biggest challenge to his 36-year rule as the nation faces worsening myriad problems which critics say have been caused by his misrule.

Panicking authorities have resorted to using disproportionate force in their desperate bid to contain the growing civil unrest.

On Saturday, heavily armed police and soldiers terrorised residents and protesters in a bid to foil nationwide protests which had been called by 18 opposition parties coalescing under the banner of the National Electoral Reform Agenda (Nera).

Government’s savage clampdown against dissenting voices in the country, saw scores of opposition members and pro-democracy activists being arrested by police at the weekend — amid charges by critics that the country was now effectively operating under a state of emergency.

In the meantime, the High Court yesterday deferred to September 27 hearing an application by pro-democracy groups and opposition parties in which they are seeking to have a new police ban on demonstrations in Harare overturned.

Judge president George Chiweshe deferred the hearing to allow the parties to file their heads of arguments.

Comments (19)

at least shes doing something for us.

kelly - 20 September 2016

i do not want to be issued bond notes on withdrawing my salaries.thank you.

Danford - 20 September 2016

Mujuru is keen to be seen as outside of ZANU PF but its all part of the trick. She is ZANU PF

Shumba Chivi - 20 September 2016

too little too late madam pig. we know you true colours that is you were confronted about gukurahundi in Pretoria. zhundu kugara mundove zvanzi ndave mombewo.

mukovhe wa tsilidzi - 20 September 2016

We really need bond notes. I cant spent days withdrawing my money from bank. Better they give us bonds. Guys Lets not just reject everything without looking at the benefits. The issue of bond notes has got more benefits than what you think. If we reject bond notes what are we going to use to buy from the shops. Right now even ecocash or telecash do not have money. Lets us be serious guys. Lets support our government on this issue of bond notes. We can go thirsty while standing in the stream with flowing water. Those who oppose bond notes are not keen to see this country move foward

MAHWE - 20 September 2016

if bond notes are good why are they not being advertised so we can familiarise with their security features.They are not for us.THEY ARE FOR THEM.ITS BETTER TO USE PLASTIC MONEY THAN THOSE WORTHLESS PAPERS.

tobias ndo - 20 September 2016

Tsikidzi you are absolute rubbish. Your brains are well-coated with a drunkman's faeces who has been boozing super chibuku. To hell with your great ancestor Gushungo

Captain D - 20 September 2016

y dd cabs close some of their branches especially in bulawayo, surely we are tired of queueing for longer hrs, can management switch on and open some of yo branches so as to cut long winding queues each and every month pliz

jonas - 20 September 2016

True bond notes will equate the US dollar but only for one hour. Who in his right mind wants to be paid in useless dollars with zero market or exchange value outside Zimbabwe? To those of us who are still campaigning for these Zanu Pf dollars how many of you still trust the Mugabe government on economic matters ....after decades of economic disasters, disasters which only the ZANU PF elite are immune to. As for me I say no to ZANU PF dollars

Viva Unidade - 20 September 2016

Be careful with the likes of vanaJoyce ava, they want to use us isu vetumari tushoma kuti tirambe mabond notes titenge tiri muno matinokwanisawo so that they will find ways to externalise their millions in hard currency out of the country! She is not doing it for us but using us for herself! What solution has she got? I think she needs to spell it out then if it's better we can take it as option. Any politician who urges people to protest without a solution to their problems is only there to use the masses!

Eagle-Eye - 21 September 2016

the solution, is not supporting nonsense. remove mugabe and his group of plunderers and replace with new leadership, with new energy and new insights.mugabe and ZANU pf have specialized in plundery and can't correct their own wrong. gadzirisa mbavha're now focused. keep up the good work.

Smithbetter - 21 September 2016

To hell with this nonsense dysfunctional surrogate toilet paper that is to masquerade as currency while Zanu PF bigwigs mopup all circulating USD, It cant work it cant work enough is enough

Foreign Fossil - 21 September 2016

Those in support of bond notes are vendors and dealers who know that their business is going to flourish again. a formal manufacturer will not accept that because after selling your wares one will be left with a useless paper that cannot be used to import raw materials at the end of the day. these bond papers will cause close of a few industries left in the country. as for the few formally employed, there wont be joy at all as the bond paper will only be good at buying chingwa and upfu on the streets as you wont be able to save your earnings nor make investment just like what was on the ground 2007/8 with the zim$.

Bond Notes - 21 September 2016

Is this the first time we have been taken for a ride. How can a broke govt issue valid currency.

I Sakala - 21 September 2016

i totally despise bond notes ,,,i second plastic money

frank - 23 September 2016

bond notes a non-stater issue to all people with a vision of economics

bushiri - 23 September 2016

Surely the government is doing its best to alleviate the shortage of cash we must appreciate that,but the value of that money will it not depreciate as what happened toour precious zim dollars I think let us use plastic money

THULO - 23 September 2016

u ar not serious mangudya !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

promoter - 28 September 2016

hw dis bond notes going to work pliz arre some of the photos we are seeing if are those ummmmmmmmmm

Promoter - 28 September 2016

Post a comment

Readers are kindly requested to refrain from using abusive, vulgar, racist, tribalistic, sexist, discriminatory and hurtful language when posting their comments on the Daily News website.
Those who transgress this civilised etiquette will be barred from contributing to our online discussions.
- Editor

Your email address will not be shared.