Source: Bond notes ready, out next week – Sunday News Nov 20, 2016
Harare Bureau
THE Reserve Bank of Zimbabwe will by next week have injected US$75 million in bond notes upon completion of finer security features and national public awareness campaigns of the new legal tenders.
The tender, which has already been fenced with supporting legal instruments, is meant to incentivise exporters and ease cash shortages. The apex bank governor, Dr John Mangudya, told our Harare Bureau that all required procedures and legal instruments were in place ahead of the roll-out of exporters’ bonus incentives.
“The central bank is going to avail bond notes by November 30 this year and there’s no going back to that,” said Dr Mangudya.
“All the processes — which include designs, logistics and legal instruments — are already in place to roll-out the bonus incentives in the form of bond notes to motivate our exporters to produce more. The main reason of bringing the bond notes is to bring liquidity into the economy and make transacting easier, hence we are encouraging more exports to help the country to get out of this cash crunch. Exporting is the only way of getting cash into Zimbabwe. Without exporters, we won’t have physical US dollars. That is why we are pushing our exporters to produce more so that we can have more cash.”
Bond notes derive their value from the Nostro Stabilisation and Export Finance Facility provided by Afreximbank. The facility caps the total amount of bond notes to be issued at US$200 million. Bond notes will be released in denominations of 2 and 5 and will be pegged at 1:1 with the United States dollar.
Dr Mangudya said the central bank had held back introducing bond notes as a strategy to conscientise the public first.
Exporters are expected to start benefiting in coming days from about US$75 million worth of bond notes. Economists say the total US$200 million worth of bond notes, translating to exposure of an average of US$19,23 per person, was too insignificant to trigger inflation.
The central bank came up with the bond notes as a way to guard against money laundering, and capital externalisation and flight. Dr Mangudya said bond notes were not a surrogate Zimbabwean dollar, but a financial instrument issued at par with the US dollar. The US$200 million export incentive will remain in existence as long as the facility guaranteeing their existence is in place. Small-scale tobacco farmers and miners will get a maximum of a five percent bonus incentive; whereas their large-scale counterparts will receive a 2,5 percent boost. Tobacco exporters are set to get US$30 million in export incentives.
A bill has since been gazetted which enables bond notes to be legally used in the country.
COMMENTS
The great showdown is about to begin – introduction of the Bond notes that are meant to be USD 1 = Bond ZW$ 1.
My bet within a week that BondZW$ 1 will be equal = to ZAR 1 ( thats a bond note will be same value as a Rand).
Forget about nostros and RTGS accounts etc – thats all a smoke screen – the public and the market will decide. So expect two prices for everything – one price for USD and one for Bond notes
As soon as the bond notes are introduced they will loose value and people will be able to “Buy” them at a discount. They will use these bond notes to pay utility bills and tax bills. There will be no real money to pay for imports, including fuel and everything will crash. Perhaps when Bob goes on holiday to the far east in January with the rest of the mafia and the last of the loot they wont come back !!!!!
Bring them on!!!!! I can’t wait for the political suicides that will take place shortly after. Hurry up with them! Forget the parliamentary Bond Note proceedings – who worries about Parly and the Constitution, anyway. PS: I have emptied my bank account – have you?
Guys making money is not production.which school have you gone to.Production is the only way to go.Gono tried that and it failed.
I am not an educated person but the Bible says with many advisers plans succeed. So far many wise and learned people have spoken against the bond notes. Surely if this was a noble idea then we should have had a balanced discussion about the bond notes. Other economies such as German have gone through terrible inflation America went through great depression but they have not seen such a way ward thinking. The governor is talking about exports but i think this is ill timed because capacity utilization is as low as 30% and our products are very expensive to produce, i am therefore not seeing there being much exports generated here. Incentives without access to capital to buy new equipment means nothing.
Hi I think you are highly educated. You make so much sense. We should have more people like you in decision-making circles.
““All the processes — which include designs, logistics and legal instruments — are already in place to roll-out the bonus incentives in the form of bond notes to motivate our exporters to produce more. ”
Howcum we haven’t seen what these things look like? There are no posters anywhere, and the teams of people sent out to “conscientise the public” have not visited every corner of Zimbabwe. Chinamasa told newspapers fake bond notes are circulating. How can this be happening when no one has seen the things?
Get some popcorn and watch this horror movie reach its crescendo.
Let it come , ZANU PF ????????????????
Mr Government what are you smoking. You must have a few skrews and bolts missing. Even my grade one grandchild makes jokes about the James Bond money.
One definition of insanity is doing the same thing over and over again, but expecting a different result. See where I am going with this?