Zimdollar account verification starts

THE Reserve Bank of Zimbabwe (RBZ) has announced that some Zimbabwe dollar account holders will get more than $5 in compensation.

In remarks likely to raise the interest of many, RBZ deputy governor, Kupukile Mlambo, in Bulawayo on Friday, said the $5 compensation was only the minimum, indicating that some account holders could get much more than that depending on the amounts of money they had in banks, among other factors.

Mlambo said the RBZ has started verifying Zimbabwe dollar account balances to pave way for the compensation of account holders who lost their savings when the country adopted the multi-currency system.

He said he expects the central bank to start compensating Zimbabwe dollar account holders in the next few months. The central bank set aside $20 million for the exercise.

"At the moment, we're going through the verification of these balances. In fact, there're two things that need to be done. We need to have an idea of the number of accounts and the amounts in those accounts. Banks have those records and have been submitting to the central bank that information.

"Secondly, there is also the other cash that wasn't in the bank, which customers had in their houses. Customers are taking that to the banks . . . so, all these things have to be worked out. The exercise is going on and I'm sure within the next few weeks or months, people will be compensated," he said.

Mlambo said this in an interview after his address at the 2015 National University of Science and Technology Insurance and Actuarial Science Society Corporate dinner.

Zimbabwe adopted the multi-currency system in February 2009 to address the challenges of an economy battling hyperinflation.

Government first announced its intention to compensate Zimbabwe dollar account holders in 2013.

In the 2015 monetary policy statement, RBZ governor, John Mangudya, said demonetisation of the Zimbabwe Dollar was in line with the policy pronouncement made by Finance and Economic Development Minister, Patrick Chinamasa, in the 2014 national budget statement and the mid-term budget statement.

Mlambo said: "Compensation will be made to anyone with a minimum account balance of $5 and then anything above $5, we'll use the United Nations exchange rate to compensate the difference."

He said that compensation of Zimbabwe dollar account holders was long-overdue and would definitely be done this year.

"Resources for the exercise are available. It's (compensation) being funded through revenues from tax collection and so on."

"The then Minister of Finance and Economic Development (Tendai Biti) had actually estimated the figure for the compensation exercise to be at $7 million but that was going to be based on the amount that you had, given the exchange rate that was ruling at the time we dollarised.

"But, we've said if we do that, for example, if we use what was the parallel market rate at the time, most people will get zero or one cent; we don't want that. We want people to get something. Everybody gets $5 and then the difference is decided by the exchange rate," said Mlambo.

While addressing Nust students, Mlambo said through demonetisation, the government was trying to create confidence in the economy by assuring the nation that the return of the Zimbabwe dollar was not imminent.

He said Zimbabweans should note that no country in the world compensates anybody for a loss incurred due to inflation.

Against this background, compensation of account holders is based on Zimbabwe dollar balances, he said.

Due to hyperinflation before the adoption of a multi-currency system, a majority of Zimbabwe dollar account holders had savings whose balances ran into quadrillions or quintillions of dollars. However, when the government adopted the multiple foreign currencies, the money became worthless and savings went up in smoke.