EDITORIAL COMMENT: Mujuru’s argument on bond notes exposes her ignorance Justice Luke Malaba
 Deputy Chief Justice Luke Malaba

Deputy Chief Justice Luke Malaba

The Constitutional Court has cleared the road for the Government to introduce bond notes next month.

This follows the top court’s dismissal, on Wednesday, of a challenge that had been filed by Zimbabwe People First leader, Dr Joice Mujuru, against the introduction of the special currency.  She was arguing that putting the money into circulation would be unconstitutional.

The court said she should wait until the Government promulgates the legislative framework for the introduction of the notes and their actual introduction and then consider a fresh constitutional challenge rather than rely on speculation.

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 does not 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 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 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.”

There was little chance that the court was going to prevent the Government from putting the notes into circulation in the first place, even before it examined Dr Mujuru’s arguments against them.

We doubt that even when the law is in place and the notes are circulating any court would actually declare the money unconstitutional.

Just in what way would the notes actually violate Dr Mujuru’s, or any other Zimbabwean’s constitutional rights for that matter, which the multiple foreign currencies in circulation since 2009, are not violating? We don’t see the logic of the argument. Any sensible person would think that currencies of other countries have more potential to violate the constitutional rights of a Zimbabwean citizen than a token currency, which is local.

Dr Mujuru might also want to know that beyond the bond notes, the Government, for argument’s sake, can actually reintroduce the local currency today and no court can rule that unconstitutional.  The issue is only that it does not make economic sense for the Government to do so yet, for the fundamentals are not right.

But the collapse of her case also highlights the capacity, or lack of it, of her legal team. It is obvious that when anyone approaches the ConCourt, he or she has to clearly establish how his or her constitutional right is violated by a law, practice or policy that is being implemented, not being planned. In this case, Dr Mujuru did not include in her papers this critical part, to attempt to help the court understand or appreciate her plight. To us this obvious mistake speaks to the competence of her lawyers, particularly Professor Lovemore Madhuku who hasn’t been getting many positive judgments from the courts since he was readmitted to the bench some nine years ago.

Dr Mujuru was arguing that the notes pose the greatest threat to the livelihoods of the people of this country, would destroy the economy and perpetuate poverty. We wonder how an intervention such as this one would become a threat to the livelihoods it is meant to protect and promote.

We are shocked, as Chief Justice Godfrey Chidyausiku was, why she and her legal team thought the court would agree with her when she does not explain why the negative implications would arise when the notes are introduced.

She is spot-on reminding us that one of the worst mistakes ever made during the hyperinflation era — an error that even the then Reserve Bank of Zimbabwe Governor, Dr Gideon Gono has admitted making — was to print loads and loads of bearer cheques. We totally agree with her, but we must add that during the hyperinflation age, there appeared to be no limit to what was being printed.  The machines were running all the time, churning out the notes that lost their value as soon as they left the printers.

However, there are fundamental differences between then and now. First, the maximum to be printed would be equivalent to $200 million, with an initial $75 million to be made available by end of next month. Second, the notes are an export incentive to be given in relation to the value of exports. This means that if there are no exports, there are no bond notes. Third, they are backed by a $200 million Afreximbank facility.

We are sure that at the height of the economic challenges, there was little consideration as to the value of Zimbabwe dollars that were being printed.  The agenda was to attempt to keep pace with run-away inflation. Now the maximum would be $200 million to be pegged on export proceeds. Unlike in the early 2000s, the notes have the backing of the Afreximbank facility. Bearer cheques were simply paper money not backed by gold, the US$ or anything.

Yes there is a perception problem partly arising from our excessively adversarial politics and also the forgettable 2000-2009 economic experience.

Some people don’t trust the notes, they don’t trust the central bank and others argue that the notes represent the local currency. Indeed, the central bank must work on recovering that trust.  Much work has been put into that already and the Government is doing likewise. But the experience the economy has had with bond coins since December 2014 must be reassuring.

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