Against the tide — Mugabe ploughs through with bond notes

FINANCE minister, Patrick Chinamasa and Reserve Bank of Zimbabwe governor, John Mangudya are strong-willed individuals.

Source: Against the tide — Mugabe ploughs through with bond notes – NewsDay Zimbabwe

BY RICHARD CHIDZA

In the face of mounting opposition to their plan to introduce a surrogate currency known as bond notes, which critics have argued is a ploy to bring back the Zimbabwean dollar through the back door, the duo have put on a brave face and rolled out the bond notes that will start circulating today.

Indications are that the bond notes will continue to divide Zimbabweans and opposition to the introduction of the currency will continue, even with their forced introduction.

Tourism minister Walter Mzembi remains the lone voice of reason in President Robert Mugabe’s government, arguing the introduction of the surrogate currency will spell doom for his sector.

Mzembi has called for the adoption of the South African rand as a solution rather than printing the bond notes.

While Zimbabwe’s economy continues on its downward spiral, the tide continues to rise against the notes, but Mangudya and Chinamasa have obstinately pushed on.

“The bond notes shall be introduced by the end of the month, as we have been advising. Bond notes will operate within the multi-currency system, where citizens have a choice to withdraw from their bank accounts legal tender of choice from US dollars, rand, euro or bond notes,” Mangudya said last week, before, at the weekend announcing that the surrogate currency will be in circulation today.

Mangudya threw the gauntlet at his critics, challenging them to “bring alternatives rather than just shout”.

“Those that are arguing against bond notes must bring alternatives on the table. We cannot continue with this monologue that bond notes are bad. We cannot be expected to fold our hands and watch the economy go down.

“We have met with these groups as a way of interaction and our doors are open for continuous engagement. This has helped, in a way, sharpen our programmes and policies, but it has never been an indication of government’s willingness to reverse the introduction of bond notes,” the apex bank chief said.

University of Zimbabwe lecturer and economist, Ashok Shakravathi said Zimbabwe must adopt the South African rand.

“There is a much better strategy, the most important of which is to adopt the rand. We do not need to talk to the South Africans, but just do as we did with the US dollar. It is a fact that in 2009, about 60% of the currency circulating in the economy was the rand and we can adopt that currency informally.

“All prices should then be charged in rands and Chinamasa’s budget should also be in that currency. That way we can bring stability into the market,” he said.

Arch-government critic and opposition People’s Democratic leader, Tendai Biti accused the government of outright theft and bringing bond notes as a stop-gap measure to cover “their corruption”.

“We have to analyse why the bond notes are being foisted on Zimbabweans. This is a way of trying to fill a big hole they have created by stealing depositors’ money kept at the central bank.

“Now they want to force people to all use plastic money. They are creating hot money through the use of debit cards. They want even the woman selling tomatoes to have a debit card,” he said.

“We all live under the illusion that we have money when in actual fact we do not. The solution is political. We are tinkering with the deck when the Titanic is sinking.”

Biti said adopting the rand would not solve the country’s problems.

“Some are arguing that we adopt the rand, but they will just bastardise it as they did with the Zimbabwe dollar, the US dollar and the bearers cheques. In the end, we will likely move on to the naira, but that is not a solution.
We need political solutions and the national transitional authority will be a giant leap in the right direction,” the former Finance minister said.

Social activist and Tajamuka front-man, Promise Mkwananzi argued that authorities were getting it wrong and instead of concentrating on the currency issue, Zimbabwe needs to deal with its poisoned policy environment.

“The argument that we have not given alternatives is as lame as the authorities are chasing the wrong things. They need to deal with the investment environment, repeal the indigenisation law and such other toxic legal statutes that have kept investors away,” he said.

MDC-T spokesperson, Obert Gutu said Mangudya and Chinamasa represent an uncaring State that can afford to ignore the people’s views.

“The Zanu PF regime has never, ever cared about the interests of the majority of Zimbabweans. From 1980, President Robert Mugabe has been obsessed with the politics of power retention at whatever cost.

Political commentator, McDonald Lewanika said the government’s “pigheaded” response to protests and arguments against bond notes pointed to a sinister motive behind the surrogate currency. He said the decision by the government to introduce bond notes, despite counsel on its disastrous effects economically, was self-serving.

“The insistence shows that they are a lifeline for the government and because of those myopic interests it will serve in the short run, they are prepared to do long term damage to country’s economy,” Lewanika said.

That, unfortunately, is not new and is the bane of Zimbabwean politics, which is a tragic story of how those in power serve no one but themselves, and listen to no counsel other than theirs — the challenge of people in power to serve myopic partisan interests rather than to represent the people and facilitate long term development and economic growth for the country.

COMMENTS

WORDPRESS: 7
  • comment-avatar
    Morty Smith 5 years ago

    Zimbabwe earns enough currency for its needs. The only reason there is a shortage of dollars is because the government has been taking all the real money out of the system. The credible “alternative” is for the government to stop its criminal theft of the peoples money from the banks.

    All this talk of Rands and the like is hot air.

    Reality is that 100 bonds will buy you US$70 at Roadport today. That is the same rate as implied by the Old Mutual share price nearly. This is as good as it will ever be. Rates go down from here and this is only day one.

    • comment-avatar

      .

      Are you being serious, Morty ???????

    • comment-avatar

      .

      Are you being serious, Morty ???????

      It sounds as if your ‘Economics Professor’ was a cross between Mr Bean on steroids, and Gideon Gono’s daughter’s rabbit !
      .
      If you think about it, the Zanu Chefs in Zimbabwe have already stolen so much that it is difficult to construct a reason WHY they should HAVE actually to PAY their creditors ?

      In the short term, all they actually have to do is to ‘TRANSFER’ the amounts they owe – FROM their own accounts (increasing their overdrafts) INTO their creditors accounts.

      They do NOT even have to have the ‘paper’ – US $ OR ‘007 Bond Notes’ – to ‘cover’ the amounts they have ‘transferred’.

      They just have to LIMIT the amount that their creditors are allowed to WITHDRAW from their accounts in any day (or week).

      **** Which they are already done !!!! **** (Currently $ 50 per day)

      …… The ‘Banks’ will never demand repayment of their ‘OVERDAFTS’ because if they did, the bank managers would be’Dzamara-ed’.

      …… And this method would not cause massive IMMEDIATE inflation, because they would not suddenly be flooding the market with an enormous excess Monetary Supply (Demand) without any corresponding increase in Production (Supply).[Remember that most of the excess Monetary Supply will never actually hit the market, because the Zanu thieves would have PREVENTED the people from drawing most of their own cash !]

      …… This leaves most of the ‘007 Bondi Notis’ available to keep trickle-feeding to maSojas. nemaPurisa and other Civil Servants, in order to persuade them not to hang the Chefs from the nearest tree.

      But what stops this crooked plan from working in anything but the shortest term ?

      1. The Balance of Payments deficit (Trading a/c) is already running at almost $ 4 billion pa (Imports exceed Exports) – and inexorably rising.
      2. ‘Foreign Exchange’ is going to become ever scarcer. (We are increasingly ‘spending’ more Forex than we are ‘earning’)
      3. We cannot increase ‘Production’ because (a) We do not have the Forex to ‘re-tool’ our disintegrating industrial base. (b) We have destroyed our productive farms and can no longer feed ourselves. (c) We have killed our mines through greed and incompetence. (d) We have chased away our paying tourists with our ‘Jambanjas’, corrupt police and rude and inefficient civil servants. And (e) We have pissed off EVERYONE who could possibly have helped us.
      4. We cannot ‘Borrow’ the capital we need to fix the economy ($ 400 billion ?), because we have not honoured ANY of our previous financial commitments, and NOBODY will lend us any more money. (This has absolutely NOTHING to do with either ‘Zidera’ or ‘Sanctions’, to which the Chinese, Russians and ‘progressive’ Non-Western bloc never acquiesced: anyway.)
      5. Since 1980 we have saddled ourselves with possibly the most arrogant, incompetent, stupid, dishonest, kleptocratic and nepotistic ‘government’ known to modern history.
      6. And on top of it all, we have chased away almost one third of our most productive, industrious and valuable citizens.

      The simple economic facts are that as we are producing less and less; we are acquiring more and more mouths to feed; foreign exchange (Real Money) will become scarcer and scarcer, and therefor ever more expensive, because we import more than we export; the inept ‘government’ will (again) print more and more worthless ‘GonoKwacha’ (by whatever name) – to delay the inevitable – thereby further fuelling ‘internal’ inflation; goods will become scarcer and scarcer in the shops; Zanu will (again) try to ‘Command’ prices – and AGAIN will fail – you cannot ‘rig the economy’
      …….

      ……. and 2008 will look like a picnic, except that THIS time there will be no Mbeki (or similar) to rescue Zanu, because the Saffers no longer give a stuff about our ‘Liberation Credentials’, and they just want the best for THEMSELVES, without millions of starving Zimbos arriving – uninvited – on the doorstep of their own job-starved and struggling economy.

      Is there an answer ?

      Yes, I believe there is.

      But we are ALL going to have to give significant ‘previously-sacred’ ground.

      CAN it be done ?

      It COULD have been done in 1980, but I don’t know that it still can.

      There has been so much water (and blood) under the bridge since the Civil War.

      And I do not refer only to Gukurahundi, the Jambanja, Marambatsvina and the Zanu / MDC terror.

      My greatest fear is that for two generations now, our young people have known no Law and Order, and I wonder if they can again be humanised after the lack of parental and extended-family and tribal support, as well as the insidiously evil Zanu ‘Border Gezi’ brainwashing.

      I ask again. “Can all decent Zimbabwe-Rhodesians live in peace again ?”

      I am an old man now, but for all your collective sake, I hope so.

      KK

  • comment-avatar
    Sabhuku 5 years ago

    VaDare vari pano koki. have an even better and simpler solution – let us reintroduce the zim dollar. It is apparently the most practical and the toughest solution to our problems. How do you know its the toughest – it does not even make the lips of our patriotic government, yet its the simplest. ZANU is afraid of a local currency because every decision of the government will be under the microscope. Every appointment, every policy (which we apparently don’t have), our economic policies, our judicial and parliamentary systems, our pubic institutions. That scares ZANU into cowardice – kana the usual mantra ye patriotism inombokandwa mupocket. Mwari muri kunonoka kani kuti dzikinura

  • comment-avatar
    People's Choice 5 years ago

    Time to bring back Ian Smith. Mugabe has destroyed the country. Ndiye rakaipisisa mutungamiri zvinogoneka rwacho. Anofanira kusiya nokukurumidza sezvinobvira.

  • comment-avatar
    Sehky 5 years ago

    Yes indeed..doomed we are. Bond is not money or currency. Whether its objectiveiz to easy cash crisis! Or simply to enable gvt to pay its bills to the servants, that’s water under the bridge. We are doomed. 2008 is back 7 fold. I wonder what Mr Morgan has to say! GNU just so that the innocent people of Zimbabwe would be duped 6 years later. Bond or whatever nonsense n hogwash introduced, the real solution is transformation in every sphere of governance…… Executive, ministries, uniformed forces……. A new wine, in a new wine skin! Period