New Zimbabwe dollar sparks court battle

4 Jul 19

A decision to outlaw the use of foreign currency in Zimbabwe has been challenged in court on constitutional grounds.

Lawyer Godfrey Mupanga supported by the Harare-based Lawyers for Human Rights group is contesting a government decision to revert to the Zimbabwe dollar.

A decree by Finance Minister Mthuli Ncube would prevent the use of US, South African and European currencies, and reversing it could derail his plans to introduce a new Zimbabwe dollar.

“Amending a principal legislation is a primary law-making power that can only be exercised by parliament,” said Mupanga’s application to the High Court in the capital, Harare, according to the Bloomberg news agency

“Such delegation would in fact amount to abrogation and abdication of legislative authority to an executive functionary.”

Government determination to end a decade of dollarisation led to a declaration by Ncube on 24 June that a new interim currency would be renamed the Zimbabwe dollar and would be the country’s sole legal tender.

Ncube told a parliamentary committee that dollarisation was stifling the economy, which was experiencing shortages.

Bloomberg reported that Ncube had, however, repeatedly told Zimbabweans that he would wait until “fundamentals” were in place – including low levels of inflation, which hit 98% in May – before introducing a new currency.

The name of the local dollar brings bad memories for many Zimbabweans: in 2008 hyperinflation of 500 billion per cent erased its value, wiped out pensions and savings and forced authorities to adopt foreign currencies such as the US dollar.

Earlier this year Zimbabwe’s authorities introduced an interim currency – the RTGS dollar – to deal with a problem caused by the use of US dollars, more of which were leaving the country as payments for exports than entering, resulting in currency shortages.

However, many businesses have resorted to selling goods in US dollars to protect them against inflation as the interim currency has itself been losing value.

  • Gavin O'Toole, expert on Latin America
    Gavin O'Toole

    A freelance journalist. He has written six books about Latin America and taught the politics of the region at Queen Mary, University of London.

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