THE opposition Citizens Coalition for Change (CCC) has castigated President Emmerson Mnangagwa’s use of Presidential Powers to legalise the hike in interest rates by 200% and to declare lending and repayment of loans in United States dollars, saying it was unconstitutional.
New Presidential Decree Statutory Instrument 118A /22 issued on Monday stipulates that the multiple currency regime will exist until December 2025, and that authorities have the power to freeze any account suspected of abusing foreign currency in terms of the Bank Use Promotion Act.
It also stipulates that any foreign loan must be repaid in foreign currency, and that retailers selling goods at exchange rates above 10% of the prevailing interbank rate may be fined
Former Finance minister, Tendai Biti said the Presidential Powers (Temporary Measures) Act, which allow a President to bypass Parliament and make laws, was patently unconstitutional, particularly when those decrees override a specific Act of Parliament.
“Presidential decrees are an authoritarian abuse of citizens and Parliament,” Biti tweeted.
“The re-legalisation of the US$ is an embarrassing acknowledgement of the failure of four years of vigorous pursuit of a de-dollarisation agenda that was never going to work.”
He said the measures to pay back loans in foreign currency could only make sense if banks were obliged to honour deposits in the currency deposited, adding that billions of dollars were lost when citizens who had made US$ deposits were forcibly made to withdraw RTGS.
“The power to freeze accounts and the threatened imposition of punitive fines of $20 million is not only excessive, but irrational and patently unlawful. At the end of the day, it is a lot of hot air. The truth is it is cartels closely associated with the regime who are abusing the system,” Biti said.
He said the cartels have borrowed millions from banks, which they use to purchase foreign currency at the black market and auction floor.
CCC national spokesperson Fadzayi Mahere said: “In any event, a presser is not a law. These repeated illegal statements fertilise mistrust (and) the Presidential Powers (Temporary Measures) Act is unconstitutional as it offends section 134 of the Constitution. They purport to use this law to ‘entrench’ (whatever that means) use of the US$ for five years, yet even that unconstitutional law only empowers the making of SIs that last for six months.”
She said primarily, the law should have been made by Parliament so that it is tested for its constitutionality.
“Strangely, they set interest rates at 200% yet under the common law, interest must never exceed 100% of the debt in terms of the common law in duplum rule which has not been repealed. This is the poorly thought out, legally unsound approach they prefer to policymaking,” she said. Newsday