EDITORIAL COMMENT: Let’s support RBZ measures to turn around economy

THERE has been so much pessimism and doomsday scenarios painted around recent monetary policy initiatives announced by the Reserve Bank of Zimbabwe. Typically, Zimbabweans have reacted with alarm at Central Bank governor John Mangudya’s impending unveiling of bond notes to join the family of bond coins which were introduced to tackle the issue of change in the economy.

The trepidation surrounding the bond notes is couched in the misplaced notion that the government is somehow bringing back the Zimbabwe dollar via the back door. The pain and trauma of the hyperinflationary era, which reached its peak in 2008, is still fresh in the psyche of most Zimbabweans and understandably, any mention of the Zimbabwe dollar evokes sad memories. Despite assurances from monetary authorities that the bond notes are part of measures meant to address cash shortages, most Zimbabweans refuse to believe that this is the case.

Thus the RBZ has a serious public relations assignment to convince ordinary people to embrace the bond notes while allaying fears of the imminent return of the much maligned Zimbabwe dollar. While we agree that talk of a return of the Zimbabwe dollar via the bond notes is utter nonsense, we believe monetary authorities have a lot of work to do to convince the public to accept the notes.

We also strongly urge them to put in place measures to curtail the emergence of a parallel market which could spell disaster for the economy. The RBZ should increase its surveillance and monitoring activities and thwart any moves towards resuscitating the black market trade in foreign currency. The infrastructure for a parallel market is still there and all that is needed is for these illicit traders to get their hands on enough bond notes to mop up the US dollars in circulation in the economy and they are back in business.

The Central bank should prevent a situation where cash barons and other cartels are in a position to hold the nation to ransom. The printing and distribution of bond notes should be tightly monitored and banks must play their part in enforcing RBZ regulations.

Zimbabweans’ voracious appetite for a quick buck and profiteering fed the parallel market during the pre-multicurrency era and the same characters that prospered during that time could be fancying their chances with the imminent introduction of the bond notes.

Vigilance should be the watchword and the strict compliance of banks and other financial institutions to RBZ directives will be crucial to the successful roll out of bond notes. It should be remembered that the turnaround of the country’s economy hinges in part on the measures the RBZ is implementing to address cash shortages.

In this regard, we are encouraged by the endorsement of the measures by the Bankers’ Association of Zimbabwe (BAZ) and their call to the transacting public to embrace them. Newly elected BAZ president Charity Jinya on Tuesday said the new measures by the central bank would address cash shortages while simultaneously stabilising and stimulating the economy.

“The policy measures are in the main, meant to resolve the current cash shortages and ensure the efficient allocation and use of foreign exchange resources,” she said in a statement. “These measures will also stem the unauthorised externalisation of currency, which has contributed significantly to the current cash shortages as well as strengthen the multi-currency system by increasing the availability, and the widening use of alternative currencies that are part of the multicurrency basket.”

We also note that the Ministry of Finance has moved swiftly to allay public fears over the alleged imminent return of the local currency and we feel this is apt given the swirling rumours on the market. Speaking at an Interim Poverty Reduction Strategy (I-PRSP) consultation meeting in Gweru on Monday, the Permanent Secretary in the Ministry of Finance and Economic Development, Willard Manungo, said the country was not yet ready to transact in its own currency and the government would not prematurely introduce the local currency as that would derail efforts to attract foreign direct investment.

“There are fears of the return of the Zimbabwean dollar especially after the announcement by the Reserve Bank (of Zimbabwe) governor.

There are concerns that this will take us to 2008 and this is what I want to reassure you that as the Honourable Minister (of Finance and Economic Development, Patrick Chinamasa) and the Governor himself have said, we’re not yet ready for a return of the Zimbabwean dollar,” said Manungo.

“You aren’t going to find an irresponsibility on the part of government in terms of dealing with this situation. So we’re quite sensitive to what has happened and what we want to see in this country is increased investment. Issues of investor confidence, community confidence and household confidence are at the centre of everything we’re doing”.

We welcome the clarification by the Ministry of Finance on this sensitive matter and the endorsement of the bond notes by BAZ. We also call on the generality of Zimbabweans to remain positive and give the bond notes a chance just as they did with the bond coins.

Negativity breeds lack of confidence in the economy and this is not good for recovery efforts. More than ever, Zimbabweans need to close ranks and assist their government to craft strategies that will get the economy out of the woods.

At macro-economic level, the country is on track to clearing close to $2 billion in debt to international financial bodies which will facilitate access to fresh lines of credit and this should be motivational enough to spur everyone to put shoulders to the wheel for the motherland. Let’s all support RBZ initiatives to get the economy back on track.