‘Bond notes won’t end Zim’s problems’

The introduction of bond notes will not solve Zimbabwe’s socio-economic problems, University of Zimbabwe senior economics lecturer, Phineas Kadenge has said.

Source: ‘Bond notes won’t end Zim’s problems’ – NewsDay Zimbabwe December 1, 2016

The introduction of bond notes will not solve Zimbabwe’s socio-economic problems, University of Zimbabwe senior economics lecturer, Phineas Kadenge has said.

BY NUNURAI JENA/JAMES MUONWA

Speaking at a public lecture held at Chinhoyi University of Technology (CUT) yesterday, Kadenge said people were expecting “too much” from bond notes, as their introduction into the economy was only meant to incentivise exporters, boost local industry production, create employment and ease the liquidity crunch, among other benefits.

“People are mistaken that the coming on board of bond notes will solve all the country’s socio-economic challenges.
No! The bond notes are merely one of the various interventions the government has adopted to resuscitate the ailing economy. Let’s go beyond bond notes,” he said.

The issue of bond notes, which started circulating on Monday, had been blown out of proportion due to ignorance, Kadenge said.

“Some people think bond notes are linked to politics, but the truth is that they are not a currency, but a ‘thank you’ token for United States dollar receipts,” he said.

Kadenge said some quarters were agitating for “self-fulfilling prophecies” by portraying the promissory currency as doomed. He said those peddling such information were pursuing a political agenda.

The Reserve Bank of Zimbabwe (RBZ), Kadenge lamented, did not adequately educate the public on the merits and demerits, hence, the hullabaloo over the bond notes, which are valued at 1:1 against the US dollar.

However, participants at the lecture expressed scepticism of the apex bank’s move to roll out the bond notes without widely consulting various stakeholders, saying this was tantamount to playing “guerilla warfare and arm-twisting” tactics.

Onisimo Ngwere said: “We reject this arm-twisting, as we never agreed to them. Government is going ahead with bond notes so that they loot our forex in the banks and give us worthless bond paper.”

Another participant said instead of giving exporters incentives, RBZ must directly provide funds to revive industry.

The public lecture was held in conjunction with CUT, RBZ and Alpha Media Holdings, publishers NewsDay, The Standard and Zimbabwe Independent.

Meanwhile, a snap survey by NewsDay in Chinhoyi, Chegutu, Kadoma and Karoi yesterday showed that some banks had reduced maximum withdrawals from $50 bond notes to $25 and from $100 to $50 per day.

Long queues were witnessed at most banks amid chaotic scenes, as depositors jostled to make withdrawals.

Some retail outlets, service stations and vendors were rejecting the bond notes, while others had moved to embrace them.