The new currency regulations in Zimbabwe were promulgated by Statutory Instrument 199 of 2006 that came into force on 1 August 2006. These regulations were made by the President in terms of Section 2 of the Presidential Powers (Tempo rary Measures) Act (Chapter 10:20).
This particular Act of Parliament enables and empowers the President of Zimbabwe to make laws, albeit for a limited period of time, particularly in situations that require urgent legislative interventions which intervention might be so urgent that it cannot wait for the normal Parliamentary legislative process to run its full course. Put simply, therefore, the Presidential Powers (Temporary Measures) Act, in a normal democratic dispensation, should be used sparingly.
The new currency regulations introduced a new currency system in Zimbabwe with effect from 1 August 2006 by basically introducing new bearer cheques and replacing the old bearer cheques – those bearer cheques that were issued by the Reserve Bank of Zimbabwe before 1 August 2006. In simple terms, all the old bearer cheques, including all the other old coins and notes, will cease to become lawful money at 12 midnight on Monday 21 August 2006 and the Reserve Bank of Zimbabwe shall not, on and after that date, be required to make payment to the holders of those bearer cheques and/or old coins and notes. On or after 12 midnight on 21 August 2006, no financial institution shall exchange or accept an old bearer cheque.
This situation can only be changed provided the President of Zimbabwe promulgates new currency regulations allowing the extension of the cut-off date from 21 August 2006 to another future specified date.
I am not too sure whether it was necessary to introduce the new bearer cheques whose main purpose is basically to remove the last three zeros in the old bearer cheques. The pros and cons of such a move are, in my humble view, better dealt with by someone with an economics background. Suffice to state that it is quite possible that the cost of introducing the new bearer cheques might be so colossal as to run into trillions of Zimbabwe dollars. Again, I am not too sure whether our battered economy is in a position to sustain such a huge expenditure in the midst of a debilitating foreign currency shortage coupled with galloping inflation.
Many people might have wondered why the Governor of the Reserve Bank of Zimbabwe appears to have taken such a central role in the government’s efforts to turn around the economic fortunes of our motherland. I have read numerous articles, particularly on the internet, that propound the argument that the Reserve Bank Governor is virtually the de facto Prime Minister of Zimbabwe. I leave readers to make their own evaluations as to whether or not the Reserve Bank Governor has gone outside the scope of his mandate in terms of both the Reserve Bank of Zimbabwe Act (Chapter 22:15) and the Banking Act (Chapter 24:20).
However, for the benefit of my readers, I will briefly outline the core responsibilities of the Reserve Bank of Zimbabwe which are clearly set out in section 45 of the Banking Act and these are:
To continuously monitor and supervise banking institutions to ensure that they comply with the provisions of the Banking Act;
To conduct investigations into any particular banking institution or class of such institutions, where the Reserve Bank considers such an investigation necessary, for the purpose of preventing, investigating or detecting a contravention of the Banking Act or any other law;
To monitor associates of banking institutions; and
To ensure that the banking institution complies with the provisions of the Banking Act.
The Governor of the Reserve Bank of Zimbabwe is appointed by the President and he shall hold office for a maximum of two five-year terms. The Governor of the Reserve Bank of Zimbabwe’s main responsibility is to regulate the monetary system in Zimbabwe and ensure that the financial operating environment is safe and sound.
It is beyond the scope of this article to analyse whether or not the present Governor of the Reserve Bank of Zimbabwe has gone beyond the powers of his legislative mandate of running the monetary system in Zimbabwe. Some critics have even suggested that the Governor of Reserve Bank of Zimbabwe is now also delving into fiscal policy issues that should be the preserve of the Minister of Finance. Some have gone even further to argue that the functions and responsibilities of the Minister of Finance have been subordinated to the functions and responsibilities of the Governor of the Reserve Bank.
The new currency system is thus meant to ensure the introduction of new bearer cheques that will facilitate an easier and more convenient method of doing business in Zimbabwe. As many people are now familiar with; due to the massive publicity campaign in both the print and electronic media, there are some limitations on the exchange of old bearer cheques. For instance, a trader, a parastatal or a person other than an individual – that is – a company is allowed to deposit or bring for exchange at any single financial institution a maximum of $5 billion or such other amount as the Reserve Bank may specify by notice to financial institutions generally. In the case of individuals, the maximum amount of money that one can deposit or bring for exchange between 1August 2006 to August 2006 is the sum of $100 million or such other amount as the Reserve Bank may specify to financial institutions generally.
The issue that has become of major contention these days is the problem being faced by people at police road blocks and border posts where searches are conducted on people, their luggage as well as their motor vehicles. There is growing concern the police officers, members of the National Youth Service (Green Bombers) and other security agents are subjecting people to humiliating and degrading searches as well as unlawfully confiscating their money.
In terms of Section 12 of Statutory Instrument 199 of 2006, no suit, prosecution or other legal proceedings shall be instituted against the government, the Reserve Bank of Zimbabwe, a financial institution or any employee of the State, the Reserve Bank or a financial institution in respect of anything done by on or on behalf of the Government, the Reserve Bank or a financial institution with due diligence and in good faith, in the exercise of any power or other performance of any functions under the regulations.
This is a very controversial provision in that before anyone can succeed in instituting a legal suit against the Government, the Reserve Bank in terms of these regulations, he/she must be able to prove that the actions of the person(s) complained against were not performed with due diligence and in good faith.
In my view, it would be pretty difficult and expensive for an ordinary citizen to successfully prove that the actions of the person(s) complained against were performed without due diligence and good faith. This particular provision makes it virtually impossible for anyone to successfully institute legal action seeking redress for any harm that might be caused by government and/or Reserve Bank officials whilst they are enforcing the provisions of Statutory Instrument 199/2006.
It is my respectful submission that immunity should not be granted to anyone in any circumstances since this is tantamount to a severe attack on a citizen’s inherent Constitutional right to seek appropriate legal redress against the unlawful actions of agents of the State and/or quasi-governmental institutions in general.
To sum up therefore, Statutory Instrument 199 of 2006 is very controversial in more aspects than one and one really wonders whether it will be the panacea to the serious socio-economic and political problems that are presently making everyday life a nightmare especially for the ordinary Zimbabwean. Was this not a question of fire-fighting? Rushing to cure the symptoms of a disease instead of curing the main cause of the disease itself?
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