The bond notes have become probably the most topical issue since May (after the quails “zvihuta”) when the Reserve Bank of Zimbabwe (RBZ) announced their intention to introduce them. If I am not mistaken the launch date for their introduction has been postponed a record 3 times. The RBZ now says it intends to launch them at the end of the month, who knows? Only time will tell. The bond notes have brought about strange bed fellows who like the majority of the populace are treating their imminent arrival with immense trepidation. Prominent church leaders like Walter Magaya of Prophetic Healing and Deliverance Ministries (PHD), Shingi Munyeza (Senior Pastor at Faith Ministries and President of the Evangelical Fellowship of Zimbabwe) and Tudor Bismark (Founder of Jabula New Life Ministry and Chairman of the Council of African Apostles) have all come out denouncing the bond notes. On the business front there are several economic actors who have voiced their reservations on this “surrogate” currency like the Confederation of Zimbabwe Industries (CZI) and Zimbabwe Revenue Authority (ZIMRA). On the political arena Jacob Mudenda the speaker of parliament has also expressed his misgivings together with Walter Mzembi the Tourism and Hospitality Industry Minister who expressed doubts on the effectiveness of bonds notes recently. Almost all opposition parties are also all flatly against this “alien” currency.
CZI is an apex organisation in the sphere of business in Zimbabwe; it was formed in 1923 with the sole purpose of advocating for the minimalized regulation of businesses whilst spurring on economic development. Recently the CZI in its contribution to 2017 national budget rejected the bonds notes in their entirety, instead advising government to opt for the South African Rands. They agreed though that the economic fundamentals underlying bond notes make sense but the main bone of contention is the issue of confidence. The RBZ is pleading with industry to accept these god forsaken notes. The tax authority, ZIMRA chaired by Mrs Willia Bonyongwe have also waded through the same warnings advising government that it’s an ill-conceived idea causing uncertainty, exacerbating the liquidity crunch and diminishing confidence at an alarming rate. The same sentiments were shared by Zimbabwe Investment Authority (ZIA) chairman Nigel Chanakira and First Mutual Life (FML) chief executive officer Douglas Hoto. To add onto the woes of the government, the Germany company which was earmarked to print the notes Giesecke and Devrient has rejected Zimbabwe’s request to print the bond notes. This is despite the RBZ Governor having come out and openly said the structure of printing the bond notes have already been put in place with the German company.
The speaker of parliament in a thinly veiled attack on the RBZ indicated that there was no legislation promulgated yet that would give birth to these dreaded bond notes. He also aired his views against bond notes at the Zimbabwe National Chamber of Commerce (ZNCC) annual congress in Victoria Falls early this year when he intimated that the RBZ should buy gold reserves instead. It seems rather like a mere case of misplaced priorities, in the backdrop of the Bretton Woods Institutions i.e. the World Bank and the International Monetary Fund (IMF) pointing to a gloomy future, having downgraded us from an improving economy to a struggling one. The key issues that need to be addressed are curbing rampant corruption, ensuring consistent policies, head hunting patriotic top drawer talent to head parastatals, building robust infrastructure networks and implementing the productivity-improvement agenda which entails the adoption of best practices and innovation across the private and public sector. As long as the looting and plunder in this country is not stopped dead in its tracks we are doomed.
There are so many glaring questions that need answers. Why hasn’t Afreximbank done a press statement with the government in support of these bond notes and confirming the export incentive arrangement? And why hasn’t the Afreximbank published the term sheet for this arrangement as is standard procedure? Since we trade with South Africa the most why not adopt rands? What’s the plan to fund civil servants (plus the bonus) when their salaries are more than 85% of the consolidated revenue? Why can’t companies’ access their FCA’s where has the money gone? I smell a rat somewhere… A former governor once famously said that “printing money for infrastructural developments is not inflationary”, maybe the current governor once to pen his own comical jingle. It has become a wait and see game, almost reminds me of election time. As it stands its simple accounting debit under your pillow and credit the bank. How? By swiping for others in the supermarket, going to a cash baron losing 10% value, paying rent for someone who has cash via transfer etc…Zimbos are a creative bunch remember!