RBZ approach to bond notes fuelling mistrust

The Reserve Bank of Zimbabwe (RBZ) has finally begun its advertising campaign for the bond notes, all but announcing their imminent arrival. Comment: NewsDay Editor

Source: RBZ approach to bond notes fuelling mistrust – NewsDay Zimbabwe November 2, 2016

There is something quite different with this campaign in that there is no specimen to show what the currency will look like and more bewildering is that there is no launch date.

To add to the confusion, the central bank had to rely on Presidential Powers to gazette the bond notes, inadvertently opening the floodgates for a wave of lawsuits against the move.

Some lawyers argue that the use of Presidential Powers is unconstitutional and they are readying for a battle at the Constitutional Court.

We will leave that to the lawyers and litigants, but RBZ governor, John Mangudya first announced the bond notes in May, meaning the authorities had more than enough time to go to Parliament, where they have a majority and pass the law procedurally.

Now they have resorted to a contentious method that may delay the introduction of the bond notes and cause further uncertainty in an already jittery country.

To the layperson, this will serve to confirm their worst fears that bond notes were not fully thought out and the RBZ is approaching this on a trial and error basis.

Now Mangudya has an unnecessary fight on his hands and he will have a hard time convincing a sceptical nation that bond notes are a panacea to some of the country’s problems.

To further muddy the waters, last week Mangudya met with editors and said he had an open door policy and requested that the central bank and the media work together in the campaign for bond notes.

But on Monday, RBZ officials seemed to be playing hide-and-seek and refused to issue out the Statutory Instrument (SI) paving way for the issuance of bond notes.

The claim was that the document was with the RBZ governor and no one had seen it, but imagine our surprise when we found that State media had the SI and not the private media.

Mangudya seemed to think the media were being paid to sully the bond notes and believed in some conspiracy theories, but how does his open door policy work when others get information and the rest are tossed from pillar to post?

Withholding information, whether it is the SI or when the bond notes will be launched, only creates suspicion and mistrust leading to speculation, which in the end will be harmful to RBZ and the nation.

Mangudya insisted he was honest on the bond notes issue, we have no reason to doubt him, but that honesty must come with transparency too and equal distribution of information.

The use of Presidential Powers to gazette the bond notes might not certainly be the brightest idea and this might come back to haunt the central bank.