Source: Fadzayi Mahere
On the 31st of October 2016, the President of Zimbabwe purported to pass the Presidential Powers (Temporary Measures) Amendment of Reserve Bank of Zimbabwe Act and Issue of Bond Notes) Regulations, 2016 – S.I. 133 of 2016. The said regulations purport to create a legal framework for the introduction of bond notes. A bond note is a surrogate, fictional form of ‘currency’ which for all intents and purposes constitutes a Zimbabwe dollar that has been officially assigned the value of the United States dollar – well, because the President decrees it to be so in section 3(3) of the regulations.
As a matter of law, the proper course would have been for Parliament to create a framework for the introduction of bond notes by amending the Reserve Bank of Zimbabwe Act pursuant to a properly thought-out monetary policy. (It is no secret that the government has, with the assistance of our banks, raided depositors’ funds and now has to find a way to plug the gap. The Governor’s measures are not bona fide at all.) However, the President has usurped the function of Parliament by purporting to amend section 44 of the Reserve bank of Zimbabwe Act to introduce section 44B which provides that the Minister may by notice in a statutory instrument prescribe that bond notes are legal tender. This is not a sterile argument about form – the President has grossly exceeded his powers and in so doing violated the Constitution.
In terms of Chapter VI of the Constitution, the primary-law making body of Zimbabwe is Parliament which consists of the Senate and the National Assembly. The President has the power to assent (approve) bills passed by Parliament before they become law. However, the President’s function in this regard is limited to approving or disapproving content deliberated upon by Parliament after extensive debate and scrutiny. The President’s role is not, in the first place, to decide what laws should be in place – such an approach would offend the time-honoured separation of powers doctrine because it would mean that the President rules by decree. This is not permitted by the Constitution. In terms of section 131(1) of the Constitution, Parliament’s legislative authority is exercised through the enactment of Acts of Parliament.
In terms of section 134 of the Constitution, Parliament may, in an Act of Parliament delegate power to make subsidiary legislation in accordance with the powers granted in an Act of Parliament. However, the chief caveat here is that Parliament’s primary law-making power must not be delegated or assigned to anyone else. In other words, Parliament cannot arrogate to another agency of Government – and especially not the President, the power to make, amend or repeal Acts of Parliament. The rationale underlying this limitation on the scope of subsidiary legislation is to avoid a situation where the President circumvents the expedient of Parliament to create laws in a manner that raises the potential for the abuse of state power. It also seeks to ensure that Acts of Parliament (primary legislation) go through the rigours of robust Parliamentary debate, public hearings and scrutiny by the Parliamentary Legal Committee to ensure that the end result is “good law.”
It goes without saying that any law ‘passed’ in breach of the Constitution – including the bond note regulations – is ultra vires the Constitution and accordingly invalid and of no force or effect. Section 2 of the Constitution provides that the Constitution is supreme over the President – any law or practice inconsistent with it is invalid to the extent of the inconsistency.
It is not only curious, but worrying too, that the President invoked the expedient of the Presidential Powers (Temporary Measures) Act as the “enabling law” to pass the regulations. There can be no doubt that the said Act is ultra vires section 134 of the Constitution as it purports to give the President some primary law making power – on this basis alone, the resultant regulations are invalid. But before we even get there, in terms of section 6(1) of the Presidential Powers (Temporary Measures) Act, the lifespan of any regulations made in terms of the Act is 181 days. The clear import of this is that – as thing stands, the legal framework for the “bond notes” will expire within 181 days – after the government has eroded the value of bank deposits irreversibly – among other problems. What becomes of our money and our fate when the bond notes are rendered illegal by operation of law again?! The Act, unconstitutional as it is, only permits for the making of *urgent* regulations. There is nothing urgent about a set of circumstances that was known to the authorities in May 2016; we are now in November! This is compounded by the fact that the President did not even give the Minister an opportunity to craft the bond notes regulations but ‘deemed’ him to have done so in section 3, where he also purported to retrospectively legalise bond coins. (Illegalities are not new to our monetary system.)
Additionally, it can be argued with great force that is grossly irrational, thus a violation of section 68 of the Constitution, for the President to decree an exchange rate of 1 is to 1 between the bond note and the US dollar. What basis was used for such a patently nonsensical valuation of Zimbabwean paper? Those who have been following the Reserve Bank Governor’s announcements since the 4th of May 2016 when this lunacy started will note that the new regulations make no mentions whatsoever of an “Afreximbank facility” or any other reserves held to “back” the bond notes. No mention is made of any export incentive either. The reality is that the President by his decree now seeks to compel us to use the bond notes and exchange them at a value of 1:1. No introduction is required for any Zimbabwean concerning how an official rate prescribed in this manner falls into disuse and how the entire scheme shall be fertile ground for the rebirth of the parallel market where the true value of this fictitious currency will be determined by the black market. It is also noteworthy that no measures have been put in place to curb the excessive printing of this money. The law as it stands allows the government to print as many of these bond notes as they need or want. Zero safeguards are in place to curb inflation.
In sum, the regulations are riddled with spelling and grammatical errors which, along with the above-cited more substantial issues, bear testament to the fact that they were hastily put together. It is a matter of regret that our government is happy to just wing it when it comes to the question of people’s livelihoods and property.
Source: Fadzayi Mahere