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Business Reporter

POSB has started paying successful claimants, under the second phase of the programme, who had balances below US$1 000 in their bank accounts in February 2019 when the Government abolished the 1 to 1 exchange rate policy.

Following the introduction of local currency, the movement in the exchange rate resulted in a loss for depositors. 

The Government made a decision to compensate the small and vulnerable depositors who had balances of US$1 000 and below, for the exchange rate movement loss and the Government set aside US$75 million for the exercise.

POSB recently received US$25 million from the Treasury to compensate for the losses and beneficiaries are getting 60 percent of the value of their deposits at the time of the currency switch.

Disbursements to POSB account holders are in the second phase after payments to depositors of deposit-taking microfinance institutions.

In the last phase, the Deposit Protection Corporation, which supervises the compensation by local banks, said 914 claimants were paid a total of nearly US$83 000 across banks. 

The next phase will see depositors of commercial banks and building societies benefiting.

“We started paying for the losses last week Thursday after receiving the money from the Treasury,” said a POSB official who requested anonymity. 

“We still have more people lodging their claims. It’s an ongoing process.”

Beneficiaries who spoke to this publication expressed appreciation to the Government for fulfilling its promise.

“I am so happy that I have been compensated. I want to thank the Government for remembering us,” Ms Eliza Jongwe, a 67-year-old pensioner.

The Government is also in the process of compensating pensioners and policyholders whose savings were badly eroded when Zimbabwe dollarised in 2008.

The Cabinet recently approved regulations to be used to compensate pensioners and policyholders.

The Government commissioned an investigation in 2015 into how pensions and insurance benefits were paid out following an outcry from pensioners and policyholders.

Retirement savings were badly eroded due to devastating hyperinflation, which soared to a record 500 billion percent in 2008, according to the International Monetary Fund.

The Government wiped out the hyperinflation figures in 2009 when it abandoned the use of the Zimbabwe dollar for a basket of foreign currencies, but mostly dominated by the US dollar, leading to what was generally called dollarisation.

 The commission of inquiry, chaired by retired Justice Smith confirmed a “huge” loss of value to policyholders and pensioners and recommended compensation for the loss suffered.

It established that while policyholders lost value during the conversion period, they had also lost value throughout the investigation period between 1996 and 2014.

Thousands of insurance policyholders and pensioners have been hoping and holding out for additional pay-outs after receiving insignificant amounts as low as $0,08c after several years of working.

Some of them got zero values owing to lack of benefit inflation-indexation and currency de-basing. 

The loss of value left many people, after years of hard work, poor.