The Sunday Mail
Tendai Chara —
Calls have been made for Zimbabweans to embrace bond notes which experts say will increase export revenue, ease the current liquidity crunch and arrest the pilferage of and abuse of the US dollar.
In interviews carried by this paper, it was clear that the majority of Zimbabweans remain largely misinformed on issues to do with the notes, with the misinformation so gross that some are even suggesting that the country is gradually reverting to the Zimbabwe dollar era.
The Reserve Bank of Zimbabwe has, however, gone into overdrive, conducting awareness campaigns ahead of the introduction of the notes. Contrary to views that the introduction of the notes will result in panic deposit and capital flight, economists say the introduction of the notes will go a long way in removing the long queues from banking halls.
Mr Takunda Mugaga, the chief executive officer of the Zimbabwe National Chamber of Commerce said a lot needs to be done to clear the air. “The RBZ is doing a wonderful job with the awareness campaign.
However, a lot needs to be done to make sure that Zimbabweans are told the correct bond notes story. All stakeholders, among them non-governmental organisations, embassies and captains of industry must be involved,” Mr Mugaga said.
Banks have since set up a system that will allow for the smooth issuance of the notes. In a positive development, some banks have changed their terms and conditions with depositors being told that withdrawals are subject to availability and that banks reserved the right to pay in currencies that are recognised as legal tenders in the country.
Since bond notes will only be used in Zimbabwe, experts argue that their introduction will arrest capital flight, which has resulted in the liquidity crunch that has posed difficulties for businesses and individuals.
Most banks are currently limiting withdrawals to between $50 and $100 per day. Mr Kingstone Kanyere, an economist, welcomed the introduction of the notes, saying that their introduction will result in the RBZ having influence over money supply.
“The notes will increase money supply and circulation, resulting in the increase in purchasing power.”
He, however, said some goods and services are likely going to be charged differently depending on whether one is using bond notes or other currencies. According to the RBZ, the notes will be equivalent to the US dollar in terms of value.
Vice-President Emmerson Mnangagwa is on record saying Government may come up with a policy that bond notes be exclusively used for certain transactions as a way of encouraging their usage, bank accounts for bond notes and foreign currency will not be separated. When bond coins were introduced, they were initially resisted. They are, however, now on demand.
The RBZ has introduced bond notes as export incentives that will earn exporters up to five percent through goods or services or when people receive money from the diaspora. Under this scheme, the central bank would pay up to five percent incentive or bonus in bond notes to exporters.
Backed by a $200 million loan facility from Afreximbank, the bond notes will be equivalent to the US dollar in terms of value and will be accepted as legal tender. The Government has already promulgated Statutory Instrument 133 of 2016, which has since been gazetted, as a legal backing to the use of the new notes.
Mr Mugaga said the export incentive scheme which was introduced by the RBZ will benefit most sectors of the economy. He, however, singled out the mining and tobacco sectors as major beneficiaries.
“The mining and tobacco sectors will benefit the most. The RBZ must work very hard to instil confidence. It has everything to do with confidence and perceptions. Bond notes can spur an increase in export revenue. I have every reason to believe that the bond notes will be accepted.”
The new notes will come in denominations of $2 and $5 with an initial tranche of $75 million worth of notes set to be in circulation soon.
