The Sunday Mail
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 The Sunday Mail 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
Bond notes ready, out next week 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.
“The delay has been necessitated by the need to ensure that the public is made aware of the features of bond notes before they come into circulation,” he said. “There are other logistics related to the distribution of bond notes to banks according to exports realised so far, as well as the banks’ distribution of the same to different parts of the country.
“There is no way the Reserve Bank can issue bond notes in excess US$200 million and we cannot issue bond notes when there are no exports.”
Exporters are expected to start benefitting 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.
Last week, Government gazetted RBZ Amendment Bill 2016 that empowers the central bank and Finance and Economic Development Minister to issue bond notes exchangeable at par value with the US dollar.