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FreedomMupanedemo Syndication Writer
This week, the Reserve Bank of Zimbabwe (RBZ) embarked on a nationwide campaign to raise awareness among the general public on the nature of a bond notes, the features and specifications before they find their way into circulation in the next few weeks.There has been mixed feelings from among the generality of Zimbabweans on Government’s decision to introduce the new bonded notes which are aimed at easing the prevailing cash crisis.
But as the campaign unfolds, there is one pertinent fact that has not been told so far that the general public must be quick to know: that the bond notes are simply the latest addition to the basket currencies already in cir- culation but are not a currency.
Zimbabwe is pursuing a multi-currency regime and in that basket there are nine currencies that include the US dollar, the South African rand, Botswana pula, British pound.
While there is need to clear the dust and confusion about the difference between the new bond notes and the bearer cheques that were printed during the 2007-08 era and resulted in inflation hitting an all-time record, it also important to remind the public about this simple but not much articulated fact.
The RBZ Governor, Dr John Mangudya, has reiterated that the new bond notes are far from the feared bearer cheques of yesteryear. But there this simple fact that Zimbabweans and indeed the nation still has a basket full to choose from.
Even the business community has expressed mixed feelings about the introduction of the bond notes.
Instead business has suggested that the country adopts the rand.
The business community argues that since South Africa is our largest trading partner with exports to that country representing 78 percent of Zimbabwe’s total exports while imports from our southern neighbour contribute 22 percent as of March 2016, using the rand could be beneficial to local exporting companies.
“Adopting the rand will also help reduce pressure to the US dollar which is proving to be hard to come by,” said economic analyst and Zimbabwe Chamber of Commerce regional director Ms Sikhangele Sibanda.
The rand is not new. It is already in the basket and what the business community simply needs to do is to chart the way and lead by example by pegging their prices in rand.
And that is the belief and feeling even in the tourism industry which is fast becoming one of the major pillars of Zimbabwe’s economy.
Industry and Hospitality Industry Minister Dr Walter Mzembi said the tragedy was that bond notes were being turned into a political cur- rency.
He said their introduction would not have much effect on the economy.
Minister Mzembi said bond notes will act only as a complementary currency and will prove their worth by simply fighting for dominance in the multi-currency basket.
“What has happened with the bond notes is similar to what happened with the British pound following the Brexit vote. The pound was simply turned into a political currency and this is what is happening with the bond notes. Sadly, the bond notes were turned into a political currency well before they are introduced,” said Minister Mzembi.
He said the bond notes will have to prove their worth and compete with existing currencies like the US dollar has done.
He reiterated that the bond notes will only complement the currencies that are already in circulation.
“It is the Government’s duty to then lead by example and put emphasis on the currency of its choice.
“But that currency should fulfil at least some fundamental things for an economy to tick. For example, that currency should be a medium of foreign exchange to enable the purchase of foreign goods; it must be the currency for central Government’s funding, it must be a unit for private sector funding and must also help the country maintain its reserves,” he said.
Minister Mzembi said emphasis on a currency should reflect in Government transactions.
“Government’s choice of currency in all its transactions becomes key. For example, what currency is used to pay the civil service bill and other services?
“From time to time, we must review the currency of our choice and see how it performs against the others in the basket. It should, however, continue being complemented by other currencies in that basket,” he said.
He said there was need for a vigorous campaign strategy to package issues to do with new policies in the future so as to educate the masses.
“Under such circumstances like this, we don’t need to stifle debate. There should be a platform to allow open-mindedness. As it is, the bond notes are generating a big national debate and many people have reservations about this whole issue. But the bottom line is that bond notes are only an addition in the basket and all that is needed is to see if they can prove their worth,” he said.
Minister Mzembi said under the present circumstances, the bond notes will not perform to their best if the majority are still in the dark as to how they will work.
Online Reporter