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RBZ directive on RTGS dollar use, export incentive cancellation illegal

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By Alois Vinga


Bank of Zimbabwe (RBZ) Governor John Mangudya’s Monetary Policy Statement (MPS) contains serious irregularities, as regrads the introduction of RTGS dollars, withdrawal of export incentives and cancellation of Bureau de Change licences, legal watchdog Veritas said this week.

In its latest legal commentary, Veritas argues that Statutory Instruments 32 and 33 of 2019 made under Presidential Powers Act does not legally make the RTGS dollars a medium of exchange.

The Central Bank’s move to cancel all existing operational bureau de change licences through the MPS in order to allow re-registration and issuance of new licences in line with the new guidelines is also illegal, Veritas argues.

“So what the directive seems to mean is that the RBZ has cancelled the registration of all bureau de change, as well as their licences, to allow them to be re-registered in accordance with the new monetary policy.

“The cancellation of any registration or licence is a serious matter and can only be done if the registered person or licensee consents, or if a law permits the cancellation,” the commentary said.

It added that similar problems are visible in the move to withdraw export incentives which may carry similar characteristics as contracts.

“If they are contracts and (if) courts have held that such schemes are sometimes contracts then the government can cancel them only in accordance with contractual conditions impliedly agreed between the parties,” Veritas said.

The organisation argued that if the export incentives  are not contracts ,they should be canceled through an advance notice and briefing about the cancellation and without following these procedures, beneficiaries are regarded as having a “legitimate expectation” that their schemes will continue.

Government was urged through the commentary to take time to understand the legal implications of its actions.

“The government and the RBZ should remember that statutory instruments do not simply vanish when policies change:  they remain in force until they are repealed, and if they are inconsistent with the new policies they may operate to subvert them,” the legal watchdog added.