Government to compensate 2009 exchange rate movement losses

Finance Minister Mthuli Ncube has said the Treasury has set aside close to US$200 million in the 2023 financial year for compensation of investors that lost their money during the conversion period to foreign currency in 2009.

Many lost thousands of savings when the country transitioned from the local currency at the height of hyperinflation in 2009 and the government has maintained that these will be compensated.

In a speech read on his behalf at the Insurance Institute of Zimbabwe annual congress in Victoria Falls, the Finance Minister said the government is currently working on compensation modalities with the aim to come up with regulations for the pre-2009 period.

“As you are aware, the government is committed to compensate for losses made during the conversion process from US$ to Zwl$ as approved by Cabinet, where US$175 million has been budgeted for in the 2023 budget,” said Ncube.

He called for resilience in the insurance sector during turbulent times where insurance has become a risk in itself as citizens have lost trust and confidence in the sector.

Ncube said the government will remain supportive in providing a conducive environment to achieve insurance goals and targets.

“To cement the compensation process, the government is seized with the finalisation of the pre-2009 compensation regulations.

“As government, we encourage the industry to better the lives of the society by improving solutions to the challenging environment,” he said.

Ncube said investing in prescribed assets projects is a regulatory requirement that should be taken seriously to comply with the set thresholds.

He challenged the insurance sector to invest in public-private projects in infrastructure development and housing delivery, adding that currently compliance by the insurance industry to Prescribed Asset Status remains very low at a maximum of four percent against a threshold of 10-15 percent.

The Insurance Institute of Zimbabwe is celebrating 40 years since its establishment in 1982.

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