ED orders US-dollar payment on foreign currency pensions

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By Alois Vinga

PRESIDENT Emmerson Mnangagwa Friday ordered US dollar pension pay-outs on all investments under which workers injected foreign currency.

This comes after thousands of Zimbabwean workers were being forced to accept local currency benefits despite having made contributions in US dollars with most underwriters referring to the Statutory Instrument which outlawed use of foreign currency in settling domestic transactions.

But under Statutory Instrument 280 of 2020 made in terms of section 2 of the Exchange Control Act [Chapter 22:05), Mnangagwa repealed the previous regulations published in Statutory Instrument 212 of 2019 which outlawed the use of foreign currency in settling domestic transactions.

“Pension or provident funds that receive contributions in foreign currency in terms of this section, shall invest the contributions in investment instruments denominated in the same currency the contributions are made.

“As such, fund members whose contributions have been paid in foreign currency, through Nostro Accounts, pay such member’s benefits in the currency in which the contribution has been paid,” the SI said.

The President also allowed international travel insurance, motor insurance for vehicles in transit, customs bond insurance, bank cash in transit and third-party motor insurance payments to be made in foreign currency.

Other sectors covered under the privilege include safari operators insurance, export credit insurance, importers and exporters on cost, insurance and freight exporters’ insurance, including mining houses and tobacco merchants.

Special insurance policies for strategic national assets, including electricity equipment and stations, and aircraft equipment among others made by entities or individuals with free funds shall also be paid in foreign currency.

“Where Insurers receive premiums in foreign currency in respect of a policy of insurance in terms of these regulations, obligations to policyholders arising therefrom shall also be settled in the currency in which the premiums have been received,” the SI added.