Finance minister Mthuli Ncube has admitted that the country’s surrogate bond note is not equal to the United States dollar, contradicting earlier government pronouncements on the currency.
The Treasury chief also revealed that as part of political reforms meant to rebrand Zimbabwe, the Zanu PF government would repeal controversial legislation such as the Public Order and Security Act (Posa) and the Access to Information and Protection of Privacy Act (Aippa), long blamed for constricting the democratic space.
Ncube was addressing British think-tank Chatham House in London yesterday, where he admitted that market forces were dictating government policy.
“The market is setting the pace. What is left for us is choreography and management of the economic fundamentals. The economy has dollarised. RTGS [real time gross settlement] balances are over
$6 billion. The market is doing everything, we are going through a transition. The market has said these currencies [US dollar and bond notes] are not at par. I don’t want to argue with the market. The bond notes will, at some point, have to be demonetised and I cannot tell you (when that will be),” Ncube said.
In announcing the monetary policy last week, Reserve Bank of Zimbabwe governor John Mangudya reintroduced foreign currency accounts (FCAs), separating them from electronic balances, but insisted the bond note remained at par with the greenback.
The introduction of a new tax regime triggered a fresh economic crisis, with the exchange rate hitting the roof and basic commodities disappearing from shelves.
Ncube said government would not raid the new FCAs.
“Not under my watch, we will not raid FCAs. I promise we will not raid them,” Ncube said, adding: “I will investigate any raid on an FCA after the announcement of the new policy”.
“We want to clear our arrears with the World Bank, the Paris Club as well as other creditors. We are committed to meeting our targets as set by the International Monetary Fund and other creditors.”
Former President Robert Mugabe was accused of using extra-legal powers conferred by archaic laws such as Aippa and Posa to close the democratic space as well as deal with opponents of his regime.
But Mnangagwa seems to have gone all out to try and charm the world, with Ncube announcing from London that the two laws would be repealed.
“We will get rid of Posa and Aippa. That is a big change. The President (Mnangagwa) is committed to the rule of law. We are determined to protect property rights and will pay farmers who lost their farms under the land reform programme as provided for by the Constitution.”
The Finance minister defended Mnangagwa’s slim election victory and talked of legitimacy around his administration.
“There was a challenge of the presidential results. The issue was subjected to a judicial process that confirmed President Mnangagwa as winner. I don’t see a legitimacy issue there,” Ncube said, arguing Zanu PF’s two-thirds majority in Parliament also cemented Mnangagwa’s victory.
MDC Alliance leader Nelson Chamisa challenged Mnangagwa’s slim 50,8% win in the July 30 polls, where he garnered 44,3% of the vote in initial results declared by the Zimbabwe Electoral Commission before slashing the Zanu PF leader’s margin to 50,67% following the opposition party’s petition.
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