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Published On: Thu, Sep 22nd, 2016

Con-Court sets date for bond notes hearing

HARARE – The Constitutional Court (Con-Court) has set the date for hearing former vice president Joice Mujuru’s application in which she is contesting the introduction of bond notes by government.

This followed a request by the Zimbabwe People First (ZPF) leader to have her application hearing expedited after the Reserve Bank Of Zimbabwe (RBZ) announced that it was introducing 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,” Mujuru’s lawyers wrote to the Con-Court last week.

The Con-Court will now hear the application next Wednesday.

In her application, Mujuru though her lawyer Gift Nyandoro of Hamunakwadi and Nyandoro Law Chambers, 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.”

She said banks have an obligation to pay back their clients their money in US dollars if they would have deposited in that form, adding that paying in bond notes will be tantamount to compulsory acquisition of citizens’ money.

“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.

“For all purposes, it appears to me that a bond note will appear as a fake United States dollar.

“Why have they chosen the United States dollar and not any other currency?” Mujuru queried.

She said the country must stick to the multi-currency system, instead of introducing bond notes.

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.

Last week, Mangudya announced that the RBZ will be introducing the bond notes at the end of next month.

The RBZ will release $75 million worth of bond notes in smaller denominations of $2 and $5 by the end of December.

The announcement of the imminent introduction of the bond notes has caused panic among many Zimbabweans, as it revived ugly memories of the 2007 and 2008 economic era which was marked by severe food shortages and hyperinflation. -Daily News