The Reserve Bank of Zimbabwe (RBZ) has issued $43,9 million worth of bond notes, bringing the total to $72,9 million as at December 31, as the central bank forges ahead with the scheme to incentivise exporters.
Source: RBZ issues more bond notes – NewsDay Zimbabwe January 6, 2017
BY BUSINESS REPORTER
As at December 16, the RBZ had issued bond notes worth $29 million. The bond notes were introduced into the market on November 28 under the $200 million export incentive facility guaranteed by the African Export-Import Bank to boost exports and generate more foreign currency for the economy.
However, the total amount of bond notes is below the $75 million projected to be issued by the end of 2016. At the rate at which the bond notes are being issued, the $200 million envelope would be exhausted by the end of the year.
In a statement yesterday, RBZ governor, John Mangudya said the bank had paid the export incentive to 80% of exporters of “goods and services including Diaspora remittances through the issuance of bond notes in the sum of $72,9 million”.
He said the major beneficiaries of the scheme were tobacco growers ($29,4 million), gold producers ($10 million) and Diaspora remittances ($5,4 million).
Mangudya said a number of firms that had ceased exporting due to the uncompetitive domestic economic environment, which included high cost of production and a strong United States dollar, have started to export as a result of the incentive.
“Productivity, which is the panacea to the current economic challenges bedevilling the nation, is gradually increasing. This includes the expansion of the tobacco crop grown this agricultural season and the reduction in the smuggling of gold, as the 5% incentive awarded to gold producers over and above the international gold price has been regulative to discourage smuggling,” he said.
Mangudya said the export incentive scheme came when the global economy, and Zimbabwe, in particular, were facing turbulent times.
“A sudden collapse in the prices of export commodities of interest to Africa, including Zimbabwe, and the appreciation of the United States dollar transmitted serious negative economic shocks to the national economy that required the bank’s attention,” he said.
The introduction of bond notes and the aggressive use of plastic money has helped to reduce the demand for cash, which created queues at banks. The bank notes, which are at par to the dollar, had faced resistance before their issuance, as people equated the introduction of the surrogate currency to the return of the local currency, which was decommissioned last year. The Zimbabwean dollar was rendered worthless by hyperinflation and subsequently replaced by a multi-currency regime in 2009, which now has nine currencies, including the dollar, in the basket.
COMMENTS
The introduction of the bond note and the unavailability of the US$ have led to a high rate of inflation. Goods which cost $7 last year are now $10 – inflation of 40% in a US$ denominated currency.
So Comrade — the 5% export incentive doesn’t look so effective when the costs of inputs has risen 40%.
In a surprisingly sensible statement, Tsvangirai once said – you can’t rig the economy. Zanu PF and Mr Mugabe have sucked all the US$ into their own pockets and left the nation with plastic and bond notes. And these are just that – plastic and paper. So here comes hyperinflation once again.
RAMBAI.
Scoonsie, Gonzie and Mangudzie are just living legends. This is absolutely fantastic news – these guys have created $72.9 million US dollars out of thin Zanu air. I reckon that these guys will rise to the national emergency and go even harder to save the country and its people with these new US Dollar Bond notes. We will be heavily indebted to these three musketeers of fiscal discipline and the Governor of the Bank of England will be shaking in his shoes because Scoonsie could well become the next man for that post. We really need to encourage these financial warriors to print a few hundred more million dollars for the First Family for when they get back from their overseas holiday. It is always a bit tight financially when you have been on holiday and we would not want the First Family to have to suffer in any way when all the people (the happiest people in the world) at home have been feasting as a result of the brilliant Zanu leadership over the last 37 years.
Enough of ZANU brilliance over the last thirty odd years. What’s to do?
The clueless Zimbo has to come up with something before his goose is completely roasted.