Many citizens are asking if Mangudya’s bond notes are a currency? Well according to investopedia.com a currency is “…a generally accepted form of money, including coins and paper notes, which is issued by a government and circulated within an economy and is used as a medium of exchange for goods and services…” Generally a country has its own currency and it is generally used in that country alone, with a few exceptions that is to say the United States Dollar (USD) and the Euro which are widely used outside their legal jurisdictions. So based on that aforementioned explanation the bond notes are bona fide currency in their own right (if introduced). They are unique to Zimbabwe alone and you cannot use them outside the country. So therefore bond notes are Zimbabwe dollars (never mind whatever is being said by the different schools of thought).
So basing on the fact that the bond notes can only be used in Zimbabwe, the only status that befits them is that of being a low quality currency. Fair and fine the Reserve Bank of Zimbabwe (RBZ) is offering a 5% export incentive on all exports (sounds like a subsidy to me). The immediate thought that comes into mind, common sense rather is that the bond notes will most definitely be trading at a discount (no rocket science here). The men and women at the helm of RBZ were the chief architects of the run on banks. Any sane person would rush to withdraw their precious USDs upon hearing of the return of an inferior currency now in the form of #bondnotes. Rewind back eight years to 2008, a lot of Zimbos lost money, pensions, savings through hyperinflation when Gideon Gono was the de-facto Premier of Zimbabwe.
We are again on the brink of making history; no dollarised country (an economy using a stable foreign currency rather than their local currency) has EVER used a parallel currency (worse still an inferior currency). Who do these guys listen to? Who advises them? Economics Professor Steve Hanke who is a world-renowned currency expert highlighted that of the 33 dollarised economies that he studied generally outperform those comparable economies that are not dollarised. In his own words Zimbabwe would be in a much worse of shape than it is now. The havoc and pandemonium that has already ensued shows the cancerous nature of these dreaded bond notes. The introduction of the surrogate currency has been met with legal fights fronted by Zimbabwe Lawyers for Human Rights (ZHLR) and businessman Fred Mutanda who are challenging their legality at the High Court. This follows earlier attempts by Joice Mujuru of the Zimbabwe People First political party who had challenged the bond notes at the constitutional courts before her case was thrown out by the courts to what they viewed as a premature challenge.
The bond notes will contaminate the system and the ‘bad money’ will chase away the ‘good money’ relegating the precious greenback to the black market. At the moment confidence is at an all time low, and this idea of #bondnotes is only fuelling instability and uncertainty. This state of panic will implode into chaos and the continued talk of #bondnotes is only adding gallons of fuel into the fire, the raging fire is the run on the banks which can only exacerbate the chronic liquidity crunch that is prevalent at the moment.