Zimbabwe’s moves to end dollarisation challenged in court

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HARARE (Reuters) – A Zimbabwe human rights lawyer asked the High Court on Tuesday to overturn a government decision to ban the use of foreign currencies, a move that could potentially derail plans for a new currency if the court finds in his favour.

The government has introduced an interim currency, the RTGS dollar, in a bid to end a decade of dollarisation. On June 24 it renamed the new currency the Zimbabwe dollar and declared it Zimbabwe’s sole legal tender.

For many Zimbabweans, the name Zimbabwe dollar brings unpleasant memories of 2008, when the local currency was wrecked by hyperinflation of 500 billion percent, which wiped out pensions and savings and forced authorities to adopt the U.S. dollar and other foreign currencies the following year.

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Godfrey Mupanga, a member of the group Zimbabwe Lawyers For Human Rights, petitioned the court to reverse the decision to ban other currencies.

In his court application seen by Reuters, Mupanga said the decision by the national treasury and central bank was “grossly unreasonable” and should be declared unconstitutional.

The court did not immediately set a date for a hearing.

In banning foreign currencies, Finance Minister Mthuli Ncube used regulations under emergency presidential powers, which lapse in six months unless parliament passes a substantive law.

Ncube told a parliamentary committee on Monday that dollarisation was throttling an economy grappling with shortages of U.S. dollars, fuel and bread, and 15-hour daily power cuts.

Many businesses had resorted to selling goods in U.S. dollars to protect them against near triple-digit inflation as the RTGS dollar was fast losing value before the government’s surprise intervention.

Reporting by MacDonald Dzirutwe

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Godwin Okafor is a Financial Journalist, Internet Social Entrepreneur and Founder of Naija247news Media Limited. He has over 16 years experience in financial journalism. His experience cuts across traditional and digital media. He started his journalism career at Business Day, Nigeria and founded Naija247news Media in 2010. Godwin holds a Bachelors degree in Industrial Relations and Personnel Management from the Lagos State University, Ojo, Lagos. He is an alumni of Lagos Business School and a Fellow of the University of Pennsylvania (Wharton Seminar for Business Journalists). Over the years, he has won a number of journalism awards. Godwin is the chairman of Emmerich Resources Limited, the publisher of Naija247news.

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