Con­Court gives bond notes a thumbs up

Chronicle (Zimbabwe) - - Front Page - Daniel Ne­mukuyu

BOND notes will be re­leased into cir­cu­la­tion with­out glitches next month af­ter the Con­sti­tu­tional Court yes­ter­day dis­missed, with costs, a chal­lenge by Zim­babwe Peo­ple First leader Dr Joice Mu­juru, de­scrib­ing it as pre­ma­ture and spec­u­la­tive for seek­ing to chal­lenge bond notes that are not even in cir­cu­la­tion.

It is the court’s find­ing that Dr Mu­juru has to wait un­til the notes are in­tro­duced in or­der to point to the il­le­gal­i­ties in them and the vi­o­la­tion of the Con­sti­tu­tion by the le­gal frame­work to be used in re­leas­ing the notes.

The Gov­ern­ment is set to re­lease bond notes worth $75 mil­lion at the end of Oc­to­ber in 2 and 5 note de­nom­i­na­tions.

Dr Mu­juru last month filed an ap­pli­ca­tion at the Con­sti­tu­tional Court chal­leng­ing the con­sti­tu­tion­al­ity of the Gov­ern­ment’s de­ci­sion to in­tro­duce bond notes end of Oc­to­ber.

The politi­cian wanted to bar the in­tro­duc­tion of bond notes by the Re­serve Bank of Zim­babwe ar­gu­ing that it was un­con­sti­tu­tional be­cause it was likely to con­tra­vene sev­eral cited sec­tions of the Con­sti­tu­tion of Zim­babwe.

Dr Mu­juru listed Pres­i­dent Mu­gabe, Fi­nance and Eco­nomic De­vel­op­ment Min­is­ter Pa­trick Chi­na­masa, Re­serve Bank of Zim­babwe Gov­er­nor Dr John Man­gudya and the At­tor­ney-Gen­eral Ad­vo­cate Prince Machaya, as re­spon­dents in the con­sti­tu­tional chal­lenge.

The chal­lenge came just af­ter the Gov­ern­ment an­nounced its in­ten­tion to in­tro­duce the notes as part of a raft of mea­sures cal­cu­lated at stem­ming the liq­uid­ity crunch pre­vail­ing in the coun­try.

Chief Jus­tice God­frey Chidyausiku, sit­ting with eight other judges of the apex court, de­scribed the politi­cian’s con­tes­ta­tion as pre­ma­ture and spec­u­la­tive.

“Af­ter con­sid­er­ing pa­pers filed in this mat­ter and sub­mis­sions by coun­sel, the court is sat­is­fied that this ap­pli­ca­tion is pre­ma­ture and spec­u­la­tive. It is hereby dis­missed with costs,” ruled the Chief Jus­tice.

Deputy Chief Jus­tice Luke Mal­aba said: “You have to wait for the pro­mul­ga­tion of an Act of Par­lia­ment or a Statu­tory In­stru­ment first and you come back to court to chal­lenge the le­gal frame­work’s con­sti­tu­tion­al­ity. The ap­pli­cant doesn’t have enough facts for her case now and when she gets the full facts, she can still come back to court with the chal­lenge.

“At the mo­ment no one knows how the Gov­ern­ment will in­tro­duce the notes and it is pre­ma­ture to chal­lenge the con­sti­tu­tion­al­ity of the law that is not yet in place. The bond notes are not yet in cir­cu­la­tion and no one knows what they look like.

“You al­lege that bond notes will be il­le­gally in­tro­duced but the Gov­ern­ment said it will do it in terms of the law. On what ba­sis do you want us to be­lieve you? An al­le­ga­tion must not just spring out from the air”.

Ad­vo­cates Tha­bani Mpofu and Garikai Sit­hole rep­re­sented RBZ and its Gov­er­nor Dr Man­gudya while Pro­fes­sor Love­more Mad­huku and Mr Gift Nyan­doro ap­peared for Dr Mu­juru.

A di­rec­tor in the At­tor­ney Gen­eral’s Civil Divi­sion Mrs For­tune Chim­baru acted for Pres­i­dent Mu­gabe, Min­is­ter Chi­na­masa and Adv Machaya.

The Chief Jus­tice also added that Dr Mu­juru could have in­di­cated in her pa­pers how she was likely to have her rights vi­o­lated by the in­tro­duc­tion of bond notes.

“In her pri­vate ca­pac­ity, she has not stated how her rights as an in­di­vid­ual will be vi­o­lated. For ex­am­ple, if she has $1 mil­lion in her bank ac­count, she should have said it.

“If she doesn’t have even a cent in the ac­count, then she can­not suc­ceed to sue in her in­di­vid­ual ca­pac­ity,” he said.

The Gov­ern­ment con­tends that the bond notes will not be a new form of cur­rency to be used in the coun­try but just a rep­re­sen­ta­tive of a cur­rency al­ready in cir­cu­la­tion.

The cen­tral bank, the lawyers ar­gued, has author­ity to is­sue such mon­e­tary in­stru­ments in terms of Sec­tion 7(1) (d) of the RBZ Act.

Dr Man­gudya, in his found­ing af­fi­davit, said the bond notes is­sue can be re­solved by the High Court and that tak­ing it to the apex court was un­jus­ti­fied un­der the cir­cum­stances. He said the ap­pli­ca­tion was mere pol­i­tics that was be­ing smug­gled into the court of law. In her ap­pli­ca­tion, Dr Mu­juru said bond notes pose the great­est threat to the liveli­hoods of peo­ple of this coun­try.

She said they would de­stroy the econ­omy and per­pet­u­ate poverty.

Dr Mu­juru said from her ex­pe­ri­ence in Gov­ern­ment as a Vice Pres­i­dent, it was clear to her that the great­est mis­take this coun­try ever made was to print the so-called bearer cheques. She said the only rea­son­able way for­ward is to ad­here strictly to the multi-cur­rency regime while do­ing ev­ery­thing nec­es­sary to stim­u­late eco­nomic growth.

Deputy Chief Jus­tice Luke Mal­aba

Dr Joice Mu­juru

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