Government, through Finance minister Patrick Chinamasa, should be congratulated for taking responsibility for the thousands of companies which were prejudiced of more than US$540 million when the Reserve Bank of Zimbabwe (RBZ), under governor Gideon Gono, raided corporate foreign currency accounts (FCAs) in October 2007.
The Independent Editorial
This is an issue that required the specific political resolve that the government took on Tuesday. From a legal standpoint the Supreme Court had ruled that banks themselves were obliged to re-imburse the companies not a third party, the RBZ.
Nevertheless, the banks were powerless in the face of the directive from the central bank to surrender monies in FCAs. Furthermore, neither the banks nor their clients could in the post-Zimbabwe dollar era effectively sue the RBZ for their losses, as the central bank enjoyed immunity through the State Liabilities Act.
Had government insisted that the banks had lost their case in the courts and therefore the case was closed, this wasn’t going to bring real closure to the matter.
Simply put, the nation was never going to have confidence in the local banking system, neither would foreign investors.
No one has confidence in a banking system that allows state arms to appropriate, at will, the hard-earned monies of corporates or individuals, then uses the law to protect themselves from compensating the affected.
Nevertheless, the statement of intent made by the authorities is not the be-all and end-all to the issue.
There needs to be an announcement of how and when the thousands of companies are going to be compensated. As it stands, there is no doubt many of them became casualties and have since fallen by the wayside. Others are teetering on the brink of collapse. Yet the mere fact that these companies had put close to half a billion dollars in their foreign accounts means they were the geese that laid the golden eggs. They were exporters and therefore earners of the much-needed foreign currency. When they were disemboweled by the RBZ, they were no longer able to perform their vital task.
Is it little wonder then that we complain of the general lack of value addition in the economy, which most of these affected companies did? Does it take knowledge of quantum physics to realise that it’s primarily because of this that our manufacturing sector is teetering? Are we surprised therefore that imported products from all over have found their eldorado in Zimbabwe, and hence our yawning trade deficit and precarious balance of payments position? These are the chickens coming home to roost from the ill-thought out actions of Gono six years ago. Thankfully, government has realised this and has made a commitment to this form of cleansing.
However, this is only the first step (and a major one at that) towards tackling all of the legacy issues from the hyperinflation years that need to be resolved. There are still issues concerning losses incurred by holders of pension funds and life assurance policies, as well as paid-up permanent shares in building societies.
An economy grows if it generates wealth and savings. All the above-mentioned are part of national wealth and savings that this country’s citizens need restored. Government has the unenviable task of addressing this.