Zim is open for business mantra hollow

ON June 26, Information secretary Ndavaningi Mangwana announced that all mobile money transactions and trading on the Zimbabwe Stock Exchange (ZSE) had been suspended with immediate effect.

The reason for the suspensions, to quote his picturesque language, was “to deal with malpractices, criminality and economic sabotage perpetuated by the wolves in sheep skins among our population.”

These suspensions, had they been fully implemented, would have brought all business to a halt throughout the country. Fortunately, they were not fully implemented.

Neither Mangwana nor the Reserve Bank of Zimbabwe governor John Mangudya indicated precisely who had imposed the suspensions nor the law under which they had been imposed. Are the suspensions lawful?

ZSE trading suspension

The ZSE is registered as a securities exchange and supervised by the Securities and Exchange Commission of Zimbabwe (SECZ) in terms of the Securities and Exchange Act.

The commission has power to direct the ZSE to suspend its activities in terms of section 105(1)(f) of the Act, but only after a full investigation by an inspector in terms of section 103 and after the ZSE board has been invited to comment on the inspector’s report in terms of section 104.

Manifestly that procedure was not followed in this case, the suspension came like a bolt from the blue, without any preceding investigation and the commission did not order an investigation or instigate itself.

The rules of the ZSE allow the ZSE board to suspend the listing of shares and to halt dealings in shares, but this power cannot be used to shut down the entire exchange. In any event, no one has even hinted that the board initiated the suspension announced by Mangwana.

There is no other law that allows the government or any other entity to suspend trading on the ZSE.

The government’s suspension of ZSE trading and mobile banking transactions, was not done in terms of any law and was carried out with no regard whatsoever to due process and fairness.

The government itself seems to have recognised this, albeit impliedly, because no officer or institution has claimed responsibility for the suspensions and no one has mentioned the law under which they were imposed.

The ZSE and mobile banking are the main pillars of business in Zimbabwe.

The mantra “Zimbabwe is open for business” is rendered useless if the government fails to observe the laws under which business is regulated.