One disgruntled pensioner, Duncan Hugh Cocksedge has taken the Reserve Bank of Zimbabwe, CBZ and Finance Minister Mthuli Ncube to court over their unilateral conversion of his US$179 541,45 to the ill-fated RTGS in 2016.
In 2016, the RBZ issued a Directive to banks instructing them to convert US dollars to a local currency called RTGS. It was a move that left a substantial number of depositors such as Mr Cocksedge counting their losses.
Mr Cocksedge is challenging the constitutionality of the Statutory Instrument that converted US dollars balances into RTGS balances. He’s also the asking Court to set aside RBZ’s Directive arguing that it was grossly irrational and unreasonable.
Here are some of the excerpts from the court papers filed on behalf of Mr Cocksedge who is being represented by Former Finance Minister Tendai Biti:
My case is simple. I deposited into the bank goats. I expect to be paid my goats. The bank can’t give me cockroaches when I gave them goats.
It is my respectful contention that section 22 (1)(b), (d) and (e) are unconstitutional and are a breach of my right to property as protected by section 71 of the Constitution of Zimbabwe. The net effect of Section 22 is to devalue my US$ 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.
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$179 541,45, but the first respondent has failed or neglected to pay the same.
I am advised, which advice I take, that on the 22nd of February 2019 the President of the Republic of Zimbabwe enacted the Presidential Powers (Temporary Measures) Act Amendment of the Reserve Bank of Zimbabwe Act Regulations SI 33/2019. Further, I am advised that on the 24th of June 2019 the 3rd respondent enacted the Reserve Bank of Zimbabwe Legal Tender Regulations published as SI 142/2019.
Through the stroke of a pen, the 2nd respondent (RBZ) had enacted a directive whose effect was to have retrospective application in converting our US$ balances into nostro FCA. Respondents knew the impact of their actions and deceptively strove to assure the market about the 1:1 ‘Gedyegedye’ fiction.
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.
Mr Cocksedge is not the first depositor who has taken the aforementioned trio to court over this issue. Actually, the conversion of US dollars to RTGS was declared illegal by the High Court in May, this year.
However, Mthuli Ncube appealed against the ruling and took the matter to the Supreme Court which is yet to make a ruling on the case.