Zimbabweans speak out on bond notes

Source: Zimbabweans speak out on bond notes | The Herald May 6, 2016

Abigail Mawonde and Bianca Leboho
Zimbabweans have expressed mixed feelings with the proposed introduction of bond notes by the Reserve Bank of Zimbabwe, with some saying it would ease the liquidity challenges while others are opposed to the move.

RBZ Governor Dr John Mangudya made the plans public on Wednesday but did not state when the bond notes would be introduced.

Economic analyst Dr Gift Mugano told The Herald that the move was two-sided.

“I think to some extent the move by RBZ will ease the cash crisis and it will improve liquidity as we will now be having access to a variety of money but I doubt on the issues to do with public confidence.

“I think we need to take note that we have contractual obligations with a number of partners which were tied into the dollars as private sector. People are transacting every time.

“Take for example an individual who is in an agreement with FBC on a mortgage and then you have to pay monthly instalments using US dollars and now you have bond notes.

“The question now is that, obviously from a mathematical point of view, the bond note is 1:1 with the US dollar, so if the individual is going to pay the bank with the bond notes, are they taking it as the US dollar or they do not?” he said.

“So that is the kind of awareness that needs to be made to the public as it is very important.

“I think we witnessed that on the introduction of bond coins, how they have been able to tackle the issues of change.

“I think it may be a good idea but there is need for more consultation and awareness to manage the process if they want to achieve on that one.”

On the proposal by Dr Mangudya to have retailers pricing their goods using multi –currencies, Dr Mugano said: “I think that will be very difficult for retailers to price their goods in multi-currencies.

“Why would they do that when we have almost like 100 percent use of one currency?

“We do not have rands in circulation. It is insignificant.

“We do not have the Pula circulating. Why labouring them with that?

“The main currency that has been in use is the US dollar but if we had these other currencies like the Yen, the Pound, and the Euro it then becomes easier.”

Another economic analyst, Mr Brains Muchemwa said the measure was not a permanent solution to challenges facing the country.

“The introduction of the bond notes, will, to some extent, ameliorate the cash crunch although it does not cure the underlying structural challenges that have plunged us into this current crisis,” he said.

 Mr Muchemwa said there was need to boost confidence in people so that they accept the bond notes.

“The fact that the bond notes are a medium of exchange being issued by the monetary authorities means effectively that we have our own currency, which currency we have always had anyway since we started issuing the bond coins.

“The term “Zim-dollars” is so much haunted and invokes memories of hyperinflation and as such it has been very convenient, and rightfully so, for policy makers to avoid its mention when talking of new currency.

“After hyperinflation, the introduction of new currency was always going to be a challenge from a confidence perspective and creative ways have been employed to slowly build market confidence on new currency in the form of bond coins and indeed there is evidence in the market today that the SA rand is being shunned in favour of bond coins,” he said.

A Harare man, Kudakwashe Mbofana criticised the move.

“It is not a good move. Introducing bond notes is not the solution to the current cash crisis.

“Government should rather focus on ensuring that cash is not going out of the country and leaving our banks short of cash.

“The problem is also due to the dormant state of our industries.

“We should also monitor the operations of foreign industries and how they move their cash.

“We do not find many foreign people in our local banks. One wonders where the money their businesses make is going to.

“That is also contributing to the cash crisis. Let us work on our industrial production first before introducing these locally produced notes,” he said.

A cross border trader Mr Yahwe Chiponda echoed the same sentiments.

“The introduction of bond notes will worsen our economic situation. Some of us are cross border traders.

“It is hard for us to carry out our businesses with the bond notes and coins because we then have to worry about changing the money. These bond notes are the Government’s way of slowly reintroducing Zimbabwean currency which will take us back to the period between 2006 and 2008 during which we had problems with our currency,” he said.

Others were optimistic about the move.

“It is a good solution for the cash crisis. The queues in banks are hectic. People cannot fully pay fees for their children because of the cash limits at banks,” said a Harare man, Mr Pride Makamure.

Mrs Ruth Chihota said: “It is a good move. We now have three consecutive days coming to collect money at the banks.

“As long as the Government promises that the money will be of the same value with the US dollar, there will be no problem. We will be sure that we are not limited when we collect our salaries from the banks.”

COMMENTS

WORDPRESS: 17
  • comment-avatar
    chimusoro 5 years ago

    A good pragmatic solution.

  • comment-avatar

    the herald – anyepa
    when we had the GNU, Biti managed our finances by a simple rule – eat what you kill. so we spent what we had.
    but with mugabe back in charge, money was spent like it grew on trees. zanu pf is greedy with the nations money. the presidential budget alone went from $36 million under Biti to over $300 million with mugabe back in charge.
    so the US$ ran out and the people will have to pay the cost.
    mugabe will have his millions stashed in singapore and his shamwaris will drive new benz.
    the chefs will get the US$, while the people will get the bond notes, and soon it will be 1,000,000 bond notes to 1US$ and the shelves will be empty.
    RAMBAI … mugabe must go now

  • comment-avatar

    Mrs Ruth Chihota said “……..As long as the Government promises that the money will be of the same value with the US dollar, there will be no problem. We will be sure that we are not limited when we collect our salaries from the banks.”

    So, we still have individuals who continue to believe in any promise from Mugabe & his government. Hahaa! Really, from which planet are such individuals?

    Isn’t it now common knowledge that Mugabe and his government officials always indicate the opposite direction to the one they really intend to turn? When Mugabe indicates left , its certain he will turn right; and same applies to his key zanu pf and government lieutenants. They have been thoroughly trained by their boss to do just that. So, how on earth could anyone in his/her full facaulties ever take promises by such cheats seriously? This boggles the mind – no wonder we are where we are today. The simple saying – “Once bitten twice shy” – does not apply to some of us heeee. Such ostrich mentality really makes me cry. nxaaaa

  • comment-avatar

    Zimbos are a very strange Nation,how you do keep voting old people who failed to do anything tangible,when they were in their prime and fruitful ages?Do they expect miracles from this Government?This is the exact replica of the situation before the Government of Unity,only this time its gonna be worse,brace yourselves Brothers and Sisters

  • comment-avatar
    ntaba 5 years ago

    Hey, Chimusoro. Your “pragmatic solution” is another round of theft – blatant theft. Zanu is putting pictures of a Zimbabwe bird and numbers and asking the people to give up there US dollars for it – again – like Gono sold them last time. It is absolute rubbish – how much will you give me for the $100 million dollar notes from Gono?

  • comment-avatar

    Thats what is called “currency contamination” nothing more
    Those worthless papers wont give us any measure of solution..Its going to stoke more pressure on the economy..

    Anything bearing or resembling Zimbabwe currency will die a still birth. The sitting government has tarnished the “brand Zimbabwe” at Macro level.. Until will get the political fundamental right, there is no solution in sight.

  • comment-avatar
    IAN SMITH 5 years ago

    ONLY THE ZANU PF ELITE WILL HAVE $US TO EXPORT AT WILL, NOT SO FOR THE GUY IN THE STREET.
    MUGABONDS/ TOILET PAPER NO GOOD EVEN IN MALAWI

  • comment-avatar
    Nedziwe r k 5 years ago

    That we have shallow minded people who advocate for the RBZ to stop cash getting out of the country , I would on the other hand advise the diaspora to stop sending the close to US$2.0 million. Then we see how the situation is going to improve.

  • comment-avatar
    Ndonga 5 years ago

    Take hope and courage from the quote below!

    “Never interrupt your enemy when he is making the same mistake twice”…Napoleon Bonaparte

  • comment-avatar

    The actual amount of money Zimmagabe has will be same with or without the bond notes. The only difference will be that each $1 bond or otherwise will be actually worth less in loaves of bread or what have you.
    You cannot increase the amount of money in circulation without something happening, probably something nasty. Venezuela is currently doing this and now they are on the eve of 700% inflation. It is now costing them more to print the ‘bills’ than it’s actual buying power. A currency is only worth what a county has/ is worth/ valued at – its only paper, so it is just a division of that.
    In practical terms it helps this month to pay the governments wage bill, but happen next? bond Bananas? I suspect you simply print some more and hope that the 3rd month is …..oh hell…. Keep turning the handle until it all goes pear shaped. Have you not been here before? do not remember? If you produce nothing, you have nothing and beyond a point on the graph there is nothing you can do about it.

  • comment-avatar
    reader 5 years ago

    the Bond notes are not out but already people are offering 10 bond notes for every US$cash. looks to me inflation is on its way or the few with US$ will get very rich paying in bond notes. Imagine I want to buy a car $3000.00 US I will be able to sell #00 on the black market and buy my car for 3000 bond wonderful and the US will be smuggled out of the country.

    The Burning begins already.

  • comment-avatar

    inflation will never come again the Zim situatiom will be better now lets just wait and see be positive

  • comment-avatar
    dadzo 5 years ago

    Bond notes already lack the bonding adhesivity, in actual fact they divide and the divident proceeds are collected by the game organisers never the players.
    Unless u r an organiser of the game, dont play the game. why bcoz its a results-known, povo-lost-delaid-match.
    Bond notes for bondage.
    RAMBAI.

  • comment-avatar
    Enough is enough 5 years ago

    Once bitten twice shy.The government has proven that it is not competent of fostering economic turnaround.When a baby is still baby it wears nappys but once it has grown it will have graduated to another level where it will be ridiculous to still be wearing nappys.This government is refusing to grow and it wants to keep on wearing nappys.

  • comment-avatar
    Enough is enough 5 years ago

    .When a baby is still baby it wears nappys but once it has grown it will have graduated to another level where it will be ridiculous to still be wearing nappys.This government is refusing to grow and it wants to keep on wearing nappys.

  • comment-avatar
    radical black 5 years ago

    I’m surprised about the people who are opposed to the introduction of bond notes ,As we all know the country is facing liquidy crunch ,and we are using a currency which we don’t have control over. what do you want the government to do ,print USDOLLARS?

    • comment-avatar
      Tsotsi 5 years ago

      @ radical black

      You really don’t get it do you? By printing ‘bond notes’, then saying one bond note = 1 US$ , RBZ IS EFFECTIVELY PRINTING US$ !

      If RBZ actually had the physical foreign currency reserves in any form – gold, euros, yuan, diamonds, rands, whatever, they could just BUY US$ and import the real thing. But RBZ is bankrupt. There is NOTHING left. The World Bank, IMF, hell, even the Chinese, refuse to lend another cent. Ask yourself why?

      The problem is not a ‘liquidity crisis’ , there is nothing in the cupboard. Zero, nada, chete. Hence the need to hide the fact. Bond notes = Zim dollar Mark II. Designed to quietly but ruthlessly steal what little you have left. Wake up!