HomeLocal NewsPensioner sues over US dollar savings

Pensioner sues over US dollar savings

AN 86-year-old pensioner is challenging the constitutionality of the statutory instrument (SI) that converted United States dollar balances to Real-Time Gross Settlement (RTGS) accounts, which resulted in the devaluation of his savings and pension.


Duncan Hugh Cocksedge is among hundreds of thousands of pensioners in Zimbabwe that have lost millions of dollars as their pensions and savings have been eroded and they risk destitution.

Cocksedge, a structural and civil engineer and one of Zimbabwe’s greatest sportsperson, has approached the courts to recover the US$179 541,45 balance, which was in his CABS account as at December 5, 2016.

Some writers consider him to be the country’s greatest-ever baseball player and he also played rugby, cricket and hockey. Cocksedge played hockey and baseball for the national team in the 1950s and 1960s.

He also wants the Exchange Control Directive RT/120/2018 to be declared null and void and set aside, arguing that it is grossly irrational and unreasonable and that Section 22(1)(b), (d) and (e) of the Finance Act Number 2 of 2019 be set aside.

In the application, CABS is the first respondent while the Reserve Bank of Zimbabwe (RBZ) and Finance minister Mthuli Ncube are the second and third respondents respectively.

“My case is simple. I deposited into the bank goats. I expect to be paid my goats. The bank can’t give me cockroaches when I gave them goats,” Cocksedge, who is being represented by prominent lawyer Tendai Biti, said in the application.

“It is my respectful contention that section 22 (1)(b), (d) and (e) are unconstitutional and are a breach of my right to property as protected by section 71 of the Constitution of Zimbabwe. The net effect of Section 22 is to devalue my US$ balances into a quasi-currency known as the ‘Real Time Gross Settlement’ which should then be negotiable on a willing buyer-willing seller.”

“I am an 86-year-old man who was looking to those resources for my retirement. The sum of US$179 000 would have looked after me very well. The sum of less than US$2 000 equivalent cannot last me three months.”

He said there is nothing dignified about essentially expropriating the savings of an 86-year-old pensioner who has toiled for the money all his life with the intention of cushioning himself in his twilight years.

The government introduced a basket of multi-currencies, including the US dollar, as legal tender in 2009.

In May 2016, RBZ governor John Mangudya made a major policy announcement indicating that the central bank would introduce an export incentive in the form of bond notes.

Mangudya said the facility was backed by a US$200 million fund.On October 31, 2016, through an extraordinary Government Gazette, the then president Robert Mugabe enacted the Presidential Powers (Temporary Measures) Amendment of the Reserve Bank Act on the Issue of Bond Notes Regulations of 2016, which were contained in SI 133 of 2016.

Cocksedge wrote a letter to CABS, asking the bank to preserve his account and not to deposit any more funds into it.

“On the 2nd of June 2020, I wrote a letter of demand to the first respondent (CABS) demanding payment of the said sum of US$179 541,45, but the first respondent has failed or neglected to pay the same.

“I am advised, which advice I take, that on the 22nd of February 2019 the President of the Republic of Zimbabwe enacted the Presidential Powers (Temporary Measures) Act Amendment of the Reserve Bank of Zimbabwe Act Regulations SI 33/2019. Further, I am advised that on the 24th of June 2019 the 3rd respondent enacted the Reserve Bank of Zimbabwe Legal Tender Regulations published as SI 142/2019,” Cocksedge said.

He said he also understood that in August last year the Finance Act No 2 of 2019 was passed by parliament, which morphed and incorporated the provisions of SI 33 of 2019 and SI 142 of 2019. And the net effect of SI 33 of 2019 was — among other outcomes — to effectively convert all US dollar balances that existed in Zimbabwe into local RTGS$ at the exchange rate of 1:1.

“The Supreme Court has interpreted SI 33 of 2019 to mean that all indebtedness must now be converted and payable in Zimbabwean dollars. I am aware that through SI 142/2019, Zimbabwean dollar currency was restored as a sole currency in Zimbabwe and the regime of multiple currency was terminated,” Cocksedge said
“I am aware that the Finance Act No 2 of 2019, in Section 21 of the Act, amended Section 44C of the Reserve Bank Act to incorporate SI 33/2019 in making the current currency the RTGS legal tender. I am aware that Section 23 of the Finance Act restates the fact of the Zimbabwean dollar being the sole currency for legal tender with effect from the 24th of June 2019.

“However, Section 44C made it clear that funds that were held in nostro foreign currency accounts would continue being designated in such foreign currency accounts. Nostro foreign currency accounts were defined to mean any foreign accounts designated in terms of the Exchange Control Directive RT/120/2018 held with the financial institution,” he added.

Cocksedge says Exchange Control notice 120 of 2018, issued by the RBZ to separate US dollar balances between those that were classified as nostro foreign currency accounts (FCAs) and nostro RTGS was unlawful, grossly unreasonable and irrational.

“Through the stroke of a pen, the 2nd respondent (RBZ) had enacted a directive whose effect was to have retrospective application in converting our US$ balances into nostro FCA. Respondents knew the impact of their actions and deceptively strove to assure the market about the 1:1 ‘Gedyegedye’ fiction,” he said.

“As I write this affidavit now, the parallel market exchange rate between the US$ and the RTGS is 1:100. Which means that as of today my US$179 000,00 is now effectively worth a mere US$1 790,00, according to the respondents.

“The 3rd respondent (Ncube) himself, acknowledges the erosion of workers’ salaries and savings and pensions, raising by 50% the salaries of civil servants and directing that a US$75 payment would be made to all civil servants in foreign currency nostro accounts. The 2nd and 3rd respondent’s actions have thus contributed to a massive loss of value. They cannot deny this catastrophe.”

Cocksedge said he has contributed a lot to the development of Zimbabwe through his engineering works in the construction of major buildings in Harare, including Bard House, Karigamombe Centre, CABS Millennium Towers, Pegasus House, Harare International School, the European Union office block as well as Chinhoyi Hospital, among others.

He also worked for the Ministry of Roads and was involved in civil works on the Chinhoyi to Makuti road and the Bulawayo to Hwange road and was involved in the design and construction of bridges on those roads.

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