Author: TSA Press

HARARE
–
The
Citizens
Coalition
for
Change
party
led
by
Jameson
Timba
on
Wednesday
suffered
a
setback
in
its
bid
to
claim
ZiG
22.1
million
under
the
Political
Parties
(Finance)
Act
after
a
judge
ruled
that
its
application
seeking
to
bar
the
government
from
disbursing
the
money
to
rival
factions
was
not
urgent.

The
CCC
party
is
split
three-way
with
Timba’s
faction
pitted
against
two
others
led
by
Welshman
Ncube
and
Sengezo
Tshabangu.

All
three
factions
have
written
letters
to
justice
minister
Ziyambi
Ziyambi
demanding
to
be
given
the
funds
due
to
the
CCC
after
the
party
emerged
as
the
main
opposition
in
elections
held
in
August
last
year.

A
share
of
political
party
funds
is
calculated
based
on
a
party’s
electoral
performance
at
the
last
general
election.
Zanu
PF
is
getting
the
lion’s
share
of
ZWG
47.9
million.

Timba’s
CCC,
in
its
High
Court
application
launched
on
September
29,
cited
the
justice
minister,
finance
minister
and
Tshabangu
as
first,
second
and
third
respondents.
The
CCC
led
by
Ncube,
and
Ncube
himself,
later
applied
for
a
joinder
which
was
granted
without
opposition.

The
Timba
faction,
made
up
of
loyalists
of
former
leader
Nelson
Chamisa,
asked
the
High 
Court
to
issue
an
order
interdicting
Ziyambi
and
finance
minister
Mthuli
Ncube
“from
disbursing
the
sum
of
ZiG
22,116,500
or
any
portion
therefore
or
any
other
sums
of
money
due
to
the
Citizens
Coalition
for
Change
(CCC)
to
3rd
Respondent
(Tshabangu)
or
to
any
one
acting
on
his
behalf
or
to
anyone
else.”

Justice
Faith
Mushure,
in
an
October
16
judgment,
said
Timba’s
CCC
had
failed
to
establish
that
the
application
was
urgent.

The
judge
said
Timba
had
written
a
string
of
letters
to
Ziyambi
starting
on
October
16
last
year
requesting
that
the
CCC
allocation
be
deposited
in
a
particular
bank
account
number
of
the
party.

The
party
said
it
acted
out
of
concern
following
media
reports
that
the
government
intended
to
pay
out
the
money
to
Tshabangu,
who
emerged
after
last
year’s
elections
claiming
to
be
the
CCC’s
secretary
general.

Ziyambi,
contrary
to
legal
requirements,
ignored
Timba’s
letters.

Said
Justice
Mushure:
“The
provisions
of
section
4(2)
of
the
Act
are
couched
in
peremptory
terms.
The
first
respondent
(Ziyambi)
was
obliged
to
respond
to
the
application.
He
did
not.
Contrary
to
the
applicants’
averments
that
they
could
not
act
before
the
gazettement
of
the
funds
to
be
allocated
in
terms
of
the
Act,
the
first
applicant’s
right
to
response
was
triggered
by
the
lodgement
of
an
application
for
funds
in
terms
of
the
Act
and
not
the
gazettement
of
the
intended
allocation.
See
section
4(1)
of
the
Act.

“Despite
this,
the
first
applicant
(Timba
CCC)
did
not
do
anything
to
assert
its
right
to
that
response
from
the
first
respondent
from
October
16,
2023,
until
September
27,
2024,
when
they
filed
the
current
application.

“In
light
of
the
above,
the
applicants
cannot
now
argue
that
the
cause
of
action
arose
on
September
19,
2024,
when
the
first
respondent
(Ziyambi)
did
not
respond
to
their
letter.
This
was
not
the
first
time
that
the
first
respondent
had
not
responded
to
their
letter.
For
close
to
a
year,
the
first
respondent
had
not
responded
to
their
letters.

“The
applicants
could
afford
to
wait
for
the
first
respondent’s
response
for
three
or
four
months,
then
follow
up
with
another
letter.
At
the
very
last
minute,
they
then
decided
to
give
the
first
respondent
an
ultimatum
to
respond
within
48
hours,
failing
which
they
would
approach
the
court…

“On
the
facts
placed
before
me,
there
was
an
undue
delay
and
laxity
on
the
part
of
the
applicants
in
bringing
this
application
to
court.
The
factual
circumstances
giving
rise
to
this
urgent
application
were
known
to
the
applicant
and
have
been
ongoing
since
at
least
October
16,
2023.
The
applicant
took
no
steps
for
a
considerable
period
to
prevent
the
irreparable
harm
it
now
perceives.
An
applicant
is
expected
to
have
acted
with
the
same
urgency
it
wishes
that
the
matter
be
accorded.
The
expectation
is
that,
faced
with
the
alleged
failure
to
respond
from
the
first
respondent
and
the
conflicting
media
reports,
the
applicant
would
have
reacted
immediately
to
remedy
the
irreparable
harm,
rather
than
standing
back
and
doing
nothing
until
it
was
too
late.”

The
judge
also
rejected
the
Timba
CCC’s
claims
that
it
would
suffer
irreparable
harm
if
the
funds
were
released
to
rival
factions.

“The
applicants
allege
that
if
the
application
is
not
determined
now,
they
will
suffer
irreparable
harm.
They
argue
that
if
the
funds
are
disbursed
to
anyone
other
than
the
first
applicant,
there
is
no
way
of
recovering
them.
They
further
argue
that
the
amount
is
substantial
and
that
the
third
respondent
cannot
pay
it
back.
The
applicants
do
not
give
cogent
reasons
for
holding
these
views.
They
simply
make
bare
allegations,”
Justice
Mushure
noted.

“In
my
view,
if
the
application
is
not
determined
now,
the
first
applicant
does
not
irretrievably
lose
its
right
to
recover
the
money.
Neither
will
the
first
applicant
lose
its
right
to
the
money.
The
first
applicant’s
right
to
the
money
remains
open,
even
if
the
matter
is
not
dealt
with
urgently.

“…
I
consider
that
the
application
must
also
fail
on
the
aspect
of
consequence.
The
perceived
irreparable
harm
that
the
first
applicant
will
suffer
is
not
properly
substantiated.

“I,
therefore,
find
that
the
applicants
have
not
made
a
case
for
urgency.
If
anything,
the
urgency
of
the
applicants’
claim
is
self-created…
Accordingly,
I
make
the
following
order:
‘The
urgent
chamber
application
for
an
interdict
be
and
is
hereby
struck
off
the
roll
of
urgent
matters
for
lack
of
urgency
with
costs’.”

Ncube
deposed
an
affidavit
stating
that
his
party
was
the
legitimate
CCC
which
should
get
the
funding.
He
opposed
the
application
by
Timba’s
faction
arguing
that
it
was
not
urgent.

Said
the
judge.,
“I,
therefore,
find
that
the
applicants
have
not
made
a
case
for
urgency.
If
anything,
the
urgency
of
the
applicants’
claim
is
self-created…
Accordingly,
I
make
the
following
order:
‘The
urgent
chamber
application
for
an
interdict
be
and
is
hereby
struck
off
the
roll
of
urgent
matters
for
lack
of
urgency
with
costs’.”

The
ruling
leaves
the
door
open
to
ministers
to
release
the
funds
to
any
of
the
three
factions
at
their
whim.

Judge
rules
Chamisa
allies
had
failed
to
establish
that
the
application
was
urgent

Following
years
of
currency
uncertainty
and
instability,
the
Zimbabwean
government
has
provided
the
clearest
indications
yet
of
its
plans
to
move
from
the
US
dollar-dominated
multi-currency
system
by
2030
and
adopt
a
single
currency,
led
by
the
newly
introduced
Zimbabwe
Gold
(ZiG).Zimbabwe’s
economy
has
suffered
immensely
since
2008,
when
inflation
exceeded
one
million
percent.
Since
then,
the
government
has
made
six
attempts
to
adopt
a
local
currency,
with
the
latest
coming
in
April
2024
through
the
ZiG,
which
is
backed
by
a
combination
of
foreign
currency
reserves,
gold
and
other
precious
metals
worth
a
combined
USD
285m.

Since
its
introduction,
the
ZiG
has
eased
Zimbabwe’s
inflationary
pressures,
performed
significantly
better
against
the
dollar
in
comparison
to
its
predecessor
—
the
Zimbabwe
dollar
(ZWL)
—
and
has
been
lauded
by
local
bankers
and
the
International
Monetary
Fund
(IMF)
for
providing
economic
stability.

A
tough
road
ahead

On
the
back
of
this
optimism,
the
government
officially
confirmed
on
6
August
that
its
cabinet
had
approved
a
roadmap
to
adopt
the
ZiG
as
the
sole
currency
by
2030,
though
details
of
this
will
be
provided
in
due
course
by
Finance
Minister
Mthuli
Ncube.
While
it
is
positive
that
the
government
is
optimistic
about
the
stability
of
the
ZiG,
there
are
several
challenges
that
will
likely
hinder
the
government’s
plans
to
implement
a
single
currency
system
within
the
next
six
years.

For
instance,
the
country
is
currently
heavily
reliant
on
the
US
dollar
(USD)
as
the
main
denominating
currency
in
the
economy.
Statistics
from
the
Reserve
Bank
of
Zimbabwe
(RBZ)
at
the
beginning
of
August
indicate
that
70%
of
all
transactions
in
the
economy
are
denominated
in
USD
–
though
this
is
down
from
85%
when
the
ZiG
was
introduced
in
April.
Additionally,
the
ZiG
has
struggled
to
strengthen
against
the
USD
since
its
introduction:
according
to
the
RBZ,
the
ZiG
was
trading
at
13.79
to
the
USD
at
the
beginning
of
August,
1.6%
weaker
than
its
opening
trading
value
of
13.56
in
April.

While
the
decrease
in
the
use
of
USD
and
relative
stability
of
the
ZiG
can
be
seen
as
positives,
the
currency
is
undermined
by
the
same
factors
that
helped
to
undermine
previous
attempts
to
re-establish
a
sole
currency.
These
include
a
lack
of
confidence
in
the
banking
sector
and
the
local
economy,
as
well
as
the
large
scale
of
the
unregulated
informal
economy,
which
is
arguably
the
most
significant
issue
for
the
government
to
resolve.

Informal
economy
conundrum

Decades
of
inflation
pressures,
driven
by
fiscal
mismanagement
and
poor
governance
policies,
have
made
the
informal
economy
Zimbabwe’s
preferred
economic
method.
It
is
cash-based
and
relies
heavily
on
the
US
dollar.
It
has
also
become
the
best
way
for
ordinary
Zimbabweans
to
survive,
with
approximately
80%
of
the
economy
being
classified
as
informal
and
bypassing
government
regulations
and
taxes.
This
undermines
the
government’s
ability
to
collect
tax
revenues
and
contributes
to
constraints
in
its
ability
to
service
its
debts
and
provide
basic
services.

The
dominance
of
the
informal
economy
can
be
illustrated
by
the
fact
that
most
Zimbabweans,
rather
than
shopping
at
formal
retail
stores
such
as
Pick’N’Pay
and
OK,
buy
their
groceries
from
rows
of
minivans
parked
on
the
street
opposite
the
stores.
These
minivans
are
packed
full
of
products
smuggled
in
from
South
Africa,
which
are
sold
for
a
fraction
of
the
price
of
the
larger
grocers.
Even
for
local
suppliers,
the
volatility
of
the
currency
makes
it
risky
to
sell
to
the
formal
sector.
A
Zimbabwean
farmer
based
in
the
capital
Harare
advised
us
that
any
meat
sold
to
Pick’N’Pay
will
be
on
30-day
payment
terms
and
in
local
currency,
which
means
the
value
could
drop
substantially
by
the
time
he
receives
payment.
This,
in
turn,
causes
inflated
pricing
for
the
larger
retail
stores.
Meanwhile,
if
he
sells
the
meat
to
the
informal
trader,
the
price
is
in
USD
and
is
paid
immediately.

These
examples
illustrate
the
core
problem
plaguing
the
local
currency:
for
the
majority
of
citizens,
the
informal
market
has
simply
become
the
easier
and
more
convenient
means
of
conducting
business.
The
ZiG
is
also
lagging
behind
in
terms
of
circulation
in
the
economy.
More
than
four
months
after
the
currency
was
introduced,
it
is
common
for
many
Zimbabweans
(particularly
those
not
employed
by
the
government)
to
have
never
even
seen
a
ZiG
bank
note.

The
government
has
indicated
that
it
plans
to
increase
penalties
against
those
involved
in
“unjust
price
hikes,
manipulation
of
the
ZiG,
smuggling,
and
all
forms
of
unfair
trade
practices”.
While
such
plans
are
indicative
of
the
government’s
determination
to
tighten
regulations
against
the
informal
market
and
increase
the
use
of
the
ZiG
in
the
economy,
it
remains
unlikely
that
the
plans
will
successfully
penalise
the
80%
of
the
population
that
survives
through
the
informal
economy.

It
is
clear
that
the
government’s
roadmap
towards
de-dollarizing
and
adopting
the
ZiG
as
the
country’s
sole
currency
will
likely
face
several
implementation
challenges
over
the
next
five
years.
The
government
has
yet
to
provide
any
details
of
this
roadmap.
Meanwhile,
formal
businesses
in
Zimbabwe
will
continue
to
conduct
most
of
their
financial
transactions
in
USD.
Overall,
the
ZiG’s
potential
impact
looks
weak,
neither
detering
the
use
of
foreign
currency
in
the
informal
economy
nor
eroding
the
USD’s
influence
on
the
formal
economy.

The
government’s
use
of
penalties
to
force
the
ZiG
on
Zimbabweans
will
likely
backfire,
instead
increasing
the
use
of
the
informal
economy
and
potentially
causing
larger,
tax-paying
formal
businesses
to
exit
the
country.
The
ruling
Zimbabwe
African
National
Union
–
Patriotic
Front
(ZANU-PF)
–
is
also
unlikely
to
completely
ban
the
USD,
which
its
senior
members
still
covet
and
need
to
keep
the
mining
sector
–
which
is
not
conducted
in
ZiG
–
afloat.

While
the
ZiG
has
remained
stable,
the
increasing
scale
and
influence
of
the
informal
economy
will
hinder
the
government’s
long-term
plan
to
abolish
the
use
of
other
currencies.
Instead
of
using
sticks
to
push
the
ZiG,
the
government
should
instead
think
about
carrots
to
increase
confidence
in
Zimbabwe’s
financial
system
and
enable
the
government
to
implement
regulations
that
can
enable
it
to
generate
sufficient
ZiG-denominated
tax
revenue
and
support
economic
growth.

By
Costa
Nkomo

This
payment
is
part
of
a
multi-year
compensation
plan,
focusing
on
claims
protected
under
the
Bilateral
Investment
Promotion
and
Protection
Agreement
(BIPPA).

Speaking
to
journalists
after
a
dialogue
meeting
with
development
partners
in
Harare,
Prof
Ncube
confirmed
that
the
US$20
million
will
be
paid
out
before
year-end,
with
subsequent
payments
to
follow
annually.

“Specifically
on
the
matter
of
compensation
for
former
farmers,”
he
said,
“as
you
know,
we
set
aside
in
the
budget
US$20
million
equivalent
for
that
compensation,
which
is
set
to
begin
in
earnest
in
this
last
quarter.”

Despite
this
initial
payment,
a
substantial
debt
remains.
Zimbabwe
still
owes
US$176
million
to
former
farm
owners
under
BIPPA,
covering
94
claims.
The
largest
claims
come
from
the
Netherlands,
followed
by
Switzerland
and
Germany.

“We
have
been
going
through
a
verification
process,
and
that
process
has
produced
credible
results,”
Ncube
explained.
“We
know
who
they
are.
This
is
a
multi-year
program,
not
a
one-off.
Next
year,
we
will
continue
with
the
compensation
process
until
all
liabilities
are
settled.”

In
addition
to
BIPPA
claims,
the
government
has
received
441
claims
totalling
US$351.6
million
under
the
Global
Compensation
Deed.
Professor
Ncube
noted
that
US$3.5
million
of
this
will
be
paid
by
the
end
of
the
year,
representing
just
one
percent
of
the
total
claims
under
the
deed.

The
European
Union
Ambassador
to
Zimbabwe,
Jobst
von
Kirchmann,
highlighted
the
need
for
a
robust
legal
framework.
“For
now,
it
is
a
policy
and
not
yet
a
law,”
he
said.
“I
think
it
requires
further
discussion.
It’s
important
to
have
a
law
that
meets
the
needs
of
both
the
government
and
farmers,
providing
a
clear
and
effective
solution.”

Ayodele
Odusola,
a
United
Nations
representative,
praised
the
government’s
commitment
to
compensation,
noting
that
it
would
support
Zimbabwe’s
reintegration
into
the
global
economy
and
attract
foreign
investment.