Bond notes law promulgated

President Mugabe

President Mugabe

Daniel Nemukuyu Senior Reporter—
President Mugabe has gazetted Statutory Instrument 133 of 2016, which provides a legal framework for the introduction of bond notes as acceptable legal tender in Zimbabwe. SI 133 of 2016, Presidential Powers (Temporary Measures) Amendment of the Reserve Bank of Zimbabwe Act, empowers the central bank to issue out bond notes using its preferred design, form and material.

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Section 44B of the amendment reads:
“The Minister may by notice in a Statutory Instrument prescribe that a tender of payment of bond notes and coins issued by the Bank that are exchangeable at par value with any specified currency other than Zimbabwean currency prescribed as legal tender for the purposes of section 44A, shall be legal tender in all transactions in Zimbabwe to the same extent as that prescribed currency.”

In terms of the statutory instrument, RBZ will determine how the bond notes and coins will look like.

“There hereby issued by the Minister in terms of section 44B (1) of the principal Act as inserted by these regulations bond notes in such units as shall be specified by the Bank and whose design, form and material shall be determined by the Bank and notified to the public.”

The Statutory Instrument, for the avoidance of doubt, also covers bond coins that are already in circulation.

“The issuance of the bond notes referred to in the following subsections; and the bond coins in circulation before the promulgation of these regulations, shall be deemed to have been prescribed by the Minister in terms of Section 44A (1) of the principal Act as inserted by these regulations.”

Finance and Economic Development Minister Patrick Chinamasa said SI 133 of 2016 gave the RBZ power to introduce bond notes and coins with a 1:1 rate against the United States dollar.

He said creditors were compelled to accept payment in bond notes. “If one owes you money in United States dollars, you must accept payment in bond notes. You cannot refuse. “One would have discharged his or her obligation to you,” he said.

In a statement issued yesterday evening, Minister Chinamasa said RBZ would now go ahead to introduce the bond notes without any hindrances.

“The Reserve Bank of Zimbabwe will with immediate effect start the process towards issuance of bond notes as a legal tender in Zimbabwe. The process will commence with media publicity to inform and raise awareness of the public on the denominations, design, form, material and security features which are used in the bond notes to be introduced.


“This is to ensure that the public is not duped by fake bond notes that may be circulated into the market by unscrupulous elements in our society,” reads the statement. Minister Chinamasa said the President Mugabe promulgated the law as critical economic recovery measure.

“Given the criticality of the issuance of bond notes as legal tender to the recovery of our economy and also the controversy that has surrounded the subject matter, it has been decided that the legality of bond notes as legal tender in Zimbabwe should be put beyond any measure of doubt. It is to this effect that the President has today gazetted Statutory Instrument 133 of 2016, Presidential Powers (Temporary Measures) (Amendment of Reserve Bank of Zimbabwe Act and Issue of Bond Notes) Regulations, 2016. The measures that have been gazetted under Presidential Powers Regulations will fortify and underpin the existing legal framework for the issuance of bond notes,” he said.


When the Reserve Bank of Zimbabwe is satisfied that the public is sufficiently conversant with the salient features of the bond notes, it will proceed to issue them in line with the Export Incentive Scheme.

The central bank, Minister Chinamasa said, had recommended the Export Incentive Scheme in terms of Section 49 of the Reserve Bank of Zimbabwe Act (Chapter 22:15) to boost the country’s reserves through increased export earnings.

He said the Export Incentive Scheme would therefore remedy the decline of reserves, which had a negative impact on the country’s ability to make prompt settlements of its international obligations.

Minister Chinamasa said under existing legislation the Reserve Bank of Zimbabwe had power to issue bond notes in terms of the provisions of Section 7 of the Reserve Bank of Zimbabwe Act Chapter (22:15).

The bond notes, which are guaranteed by a $200 million African Export Import Bank (Afrexim) loan facility, will be at par with the US dollar. Bond notes will be first introduced in $2 and $5 denominations before gradually rolling out the $10 and $20 notes. The first phase of the bond notes introduction will see $75 million being released by end of December this year.

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  • Judas Iscariot

    “If one owes you money in United States dollars,you must accept payment in bond notes. You cannot refuse.” There goes the promise that no one would be forced to accept bond notes if you don’t like them. There goes the promise that bond notes are only an incentive for exporters. If gov’t owes civil servants bonuses in usd, they cannot refuse bond notes. Unfortunately a lot of businesses will simply choose not to provide services,resulting in empty shelves like was the case in 2008. I hope i am wrong but history tends to repeat itself.

    • Ray SA

      You are right, “Wongorora chikonzero chaita musoro uteme” introducing bond notes is not the solution, they are not fixing the problem, they are trying to bypass the
      problem. The problem is not cash shortage, the problem is the economy
      and providing a huge pile of papers and calling it money is not the

  • chadzunda

    I am running a bet. Will the inflation beat the 2008 one? Please inbox

    • tired

      75MILLION will not be enough for circulation. USD is now scarce, with public service employees awaiting for their bonuses this month will push gvt to release the remaining 125million before 2018. Therefore resulting inflation.

  • Tarubva

    Whatever, you cannot maintain value by a Statutory Instrument; the bond notes will crash against the USD the very hour they are released! This government didn’t learn a thing from Mr. Gono’s bearer checks garbage!

  • nelson moyo

    Zimbabwe’s central bankers never learn – Bond note
    United States based economics professor, Steve Hanke, who was one of the biggest critics of Zimbabwe’s bearer cheques during the country’s hyperinflationary era ( 2008), wrote on Twitter this week: “I warned Kupukile Mlambo of RBZ in May that Zimbabwe bond notes would create chaos. The RBZ is learning the meaning of chaos.”
    Mlambo is one of the two deputy governors at the RBZ.

  • nelson moyo

    These Zimbabwe bond notes or counterfeit US dollars will lose 90 per cent of their value within the first week of their release – of this I can guarantee – hold onto your US dollars under your bed or in your own pocket at all times comrades !

  • Ruzvidzo

    WT*! Thought it was quite clear that using the Presidential Powers (Temporary Measures) Act was unconstitutional. Under the new Constitution which emphasises separation of powers of the executive, legislature and judiciary, the Presidential Powers Act can no longer be used to promulgate legislation and must be repealed. Previous sets of regulations issued using the illegal Presidential Powers Act under the new Constitution are also invalid and must be passed after following due process by Acts of Parliament.
    Another case for the courts, let’s hope organisations and individuals who promote respect for the Supreme Constitution are on their toes and will rapidly place urgent applications contesting this SI 133 of 2016 before the courts.

    • Chief by Grace

      True, the President has usurped a key function of Parliament which is to make laws, and Section 2 provides for of the supremacy of the Constitution and Section 3 (2)(e) of the charter establishes the principle of separation of powers. Besides laws passed through a Presidential decree are only applicable under very special and limited emergency circumstances, and only enforceable for a maximum period of six months (hence “Temporary” measures) from the date of their promulgation after which they automatically lapse.
      The Presidential Powers (Temporary Measures) Act also violates Section 134 of the Constitution, whereby only Parliament may in an Act of Parliament delegate power to make statutory instruments within the scope of and for the purposes laid out in that Act.

    • Tapfumaneyi

      Other legal challenges notwithstanding, since temporary laws passed using Presidential Powers can’t exceed 6 months validity before becoming unavoidably defunct, does this mean Bond Notes can only be valid for a maximum period of 6 months which expires from today’s date?
      Hope they don’t forget to print “Expires on April 1st 2017″ on all bond notes!

    • Ndinevimbo

      We saw the same scenario when the police illegally issued a Statutory Instrument to ban demonstrations in Harare for one month. It took Parliament a month until it hurriedly rubber stamped the SI, while the illegal ban was left to run for virtually the entire month. Let’s hope urgent applications and legal precedents can help cancel SI 133 of 2016 BEFORE illegal bond notes are issued!

  • Chenai Chipikiri

    “He said creditors were compelled to accept payment in bond notes. ‘If one owes you money in United States dollars, you must accept payment in bond notes. You cannot refuse. One would have discharged his or her obligation to you…..” Is your bank your debtor? And you are the creditor right? See where this is going? Ndo pakafira US dollar. I warned you 6 months ago.

  • the 1st Hokage

    Thus began the end of Zanu-PF.

  • Tari

    If one owes you US Dollars, and pays in bond notes you cannot refuse?Zvatanga….chiCommunism chadzoka zve. The notes so introduced are therefore an official national currency and no longer a transaction facilitation as we have been made to believe. Alas at 1:1….here we go the stealing process of our hard earned US$ has started.

  • Gushungo WekuGP

    Laws or not we do not accept bond notes period

  • yowe

    Please Zanu PF introduce Bond Notes now’!! Hapasisina chekumirira its time to make money varume.

    • lenso

      Taura zvako hama coz mari hamuna mu system. we need money. bond note is note zim dollar

      • yowe


  • Department 6

    R – rauya
    B – bond
    Z – zvachose

  • Cashbarron

    1. informal sector currently employees about 80% of the Zimbabwe working class population
    2. Zimbabwe is thriving on imports. We cant import with bond notes.
    A significant number of products being sold (street and shops) in
    Zimbabwe are Zimra restricted. This means if the importers are to apply
    for US from their banks to fund their projects they are not going to get
    the funds.
    4. The Majority is not in favor of these bond papers fueled with Political Instability #Tajamukas. Wrong Timing Dr Magudya

    1+2+3+4= BLACK MARKET/2008 reloaded
    Correct me if I am wrong

  • wadzy


  • Fofo

    ko mari mari inochinja sei kuita bond iro iriUSD dollar musaite mafanisi

  • Fofo

    USD rochinja kuita Bond Note makupenga manje kkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkk ngariuye haro tibhene sezvo tisina mabasa munenge mangona chaizvo

  • Matigari

    Is John Magundya an economist? Wonders will never cease. The parallel market is being reintroduced. Sad. I thought Gono was the worst governor to ever exist in the world. Magundya can’t even see the $100 and $50 notes disappeared from the market since the unreasonable announcement. Despite clear evidence of creating economic disaster we are proceeding.

  • Doc

    I forsee total disastor.I do not know know y our leaders are so blind to this extend.Ini im a hustler i do buying and selling.I buy my products outside Zimbabwe(SA,Dubai and Tanzania and sale them here in Harare.Can somebody school me this basic economics that our so called leaders are failing to understand.If i sale my products then ndopihwa ma bond paper in return.Ko kana ndava kuenda kundo stocker where im i gonna get ma USD dollars coz bond ku Dubai or SA its good as toilet paper.Im afraid for my business as i was starting to enjoy the fruits.

    • Sipambi_263

      Chimbofungawo kuti you are not an exporter iwe saka US$ raunoda rinobvepi?

  • David Wheeler

    “This is to ensure that the public is not duped by faked Bond notes being circulated into the market by unscrupulous elements in our society,” says Chinamasa.

    This exactly sums up the problem. The Bond Notes are being circulated into the market by unscrupulous elements in our society – namely the Reserve Bank of Zimbabwe.
    Having stolen all the real cash in Zimbabwe, they are now trying to print their own for the cost of paper and ink, exactly as they did before with the Zim$.
    If Bond Notes are covered by a genuine loan from a reputable bank, then why can’t they convert the loan into U$Ds and circulate the U$Ds instead?
    I personally will not touch a Bond Note.

    • Sipambi_263

      My view is takajaira zvisiri izvo. The US prints the dollar everyday. Zimbabwe has to export kuti iwane US$. Ndozvinoitwa nemost countries. Munhu aita basa rokukama mukaka ava kuda US dollar handizvo hama dzangu. I know you can argue your hearts out but hazviitwe please.

  • Kusvikazvanaka

    We have said it, we are saying it and we shall say it…ZvemaBonds POVO yaramba…yakaramba huye icharamba…I do not understand why PEOPLE are now forced to take the bonds but initially it was said nobody will force anybody to take these 1:1 with USD,,…Ladies and gentlemen, the cat is out of the bag….chose to run and catch it else it will flee….Pasi nemaBONDS, Pasi neMhandu

  • zimbotry

    If Mr Mugabe would be serious about ending corruption and take action to charge people and recover such money, we would not be needing bond notes.

  • Nyakuviruka

    Out of interest I was compelled to go back to the origins of banking. In short, it started of with precious metals like gold as currency. Holders of gold deposited it with merchants and were issued with receipts. The receipts started exchanging hands as a means of payment or medium of exchange, store of value and measure of wealth (money) for as long as they were authentic and were backed by gold kept by some merchant. One may borrow the same concept and argument around the introduction of bond notes. Every account in Zimbabwe has US dollars or other currencies included in the basket of currencies. It therefore follows that our gold (US Dollars in our bank accounts) can be represented by receipts (bond notes) for purposes of convenience and trading locally without prejudicing anyone. The bond notes, even at 200 million are just a fractional representation of the total gold in our bank accounts, lets embrace them. Our duty is to be responsible citizens both individual and corporate. While speculators are a necessary evil, let our speculative actions be helpful to the market and not harmful. It may be time for us to trust government and for government to build trust levels among a largely pessimistic populace. OUR government has a greater role to play in all this.

    • James GUNIKE

      You proffer the best advice than those who childishly chose to spend a lifetime with a negative mindset and no solution.

    • PK

      I cant agree more with you. Lets embrace the Bond notes and see how we can preserve our wealth in terms of local trading. Our US$ in our accounts are the gold reserves which we will keep and trade using the bond notes on the local market.

    • Madara

      they still cant work. because the actual “gold” (the US dollar notes) are long gone. The numbers you see in the bank are just that: numbers.

  • chatunga mugabe

    haaa ** anambwa adzoka kuzoba futii

  • mandeya

    “If one owes you money in United States dollars,you must accept payment in bond notes. You cannot refuse.”

    Is this consistent with the law of contract? Is this consistent with freedom of association; freedom to collective bargaining?

  • Trust

    But nhai government. Munombozvivhunzawo kuti sei vanhu vasingaku trusteyi. Personally i think you should work on building trust with the people

  • Madara

    thats if there is only ever 200 million.

  • Hacha Duke of Enkeldoorn

    A currency should never be forced on people. Rather the reverse should obtain – wherein people stampede to access a currency. Money is a confidence issue. A currency that the transacting public does not have confidence in is dead.

  • Buxton L. Munhuwa

    We have to enlighten some of the uniformed fellow countrymen that the Chinese Yuan has joined the IMF basket as a convertable currency and with China now the world’s factory, bond notes can also be converted into Yuan for any business or individual’s import needs. Ours is a multi currency system yes, but the point is, there is no need to misallocate foreign currency(Yuan, USD, Euro, even currency from Mars etc)resources by tying them to domestic trade such as for example, Mbare tomato and vegetable market and the likes, instead of releasing it and appropriately redeploying it to foreign trade mainly in importing capital goods(machinery etc), medical drugs, and all essential goods and services we cannot produce locally.

    If there is any American official, economist or analyst observer trying to pour cold water on the Bond, it is out of malicious realisation that there is now a new boy in town called the Yuan, who’s gonna give the old dude the USD good competition.

  • Buxton L. Munhuwa

    Ooops meant we have to enlighten the uninformed fellow countrymen…………

  • Cde Mzvinavhu(Prof)

    If the authorities stick to $200 ml limit bonus alignment , the experiment will give a good start and foundation for future monetary policy towards more necessary changes. Any measures that will create public confidence towards normalizing our country`s monetary policy should be supported. No modern economic system can survive and compete without its own well managed local currency indefinitely. The US$ has proved to be a two edged sword that assisted to make our economy stable but its many side effects are now eating into our economic activities, such as cost structure, etc. The store of value function is now more dominant than being a medium of exchange as the rich started hoarding it. Its supply and demand management is beyond our authorities. Hence the need for our government to think outside the box and be create positively , while avoiding the ugly dangers of the past years .

  • Ba Chiedza

    The problem I see is that the
    issuer cannot be trusted. Let’s look at real life examples:

    1.) If I have $100 USD in my
    account and I deposit $100 bond Notes. What will my new balance be? Will it
    be $200 USD? Will my balance be split into two – $100 USD and 100 Bond Dollars? Those in the know – tell us please.

    2.) If I want to pay for my
    DstV subscription for e.g. $20USD and I have just deposited $100 bond
    notes. Will the bank make the payment for me? Or let me put it in another way.
    If I deposit $1000 bond notes, can I pay a foreign invoice of e.g. $1000 USD?

    3.) Will banks pay you
    with both USDs and bond notes when you make a withdrawal?

    4.) When you use plastic money
    to pay for something, are you using USDs or Bond Notes?

    other things being equal, I would think the way to go is to deposit any bond notes you
    are forced to accept. The bank should accept the deposit and this should reflect in your account as
    USDs which you can use as you wish. If this doesn’t happen, it means no one will
    deposit the USDs in the banks and these will be used outside the
    banking system. The bond notes will not be accepted by the majority so
    anyone forced to accept them will just deposit them hoping the banks will
    honour the USD equivalent on a one to one. Failure to do so will immediately
    create a parallel market and 2008 will be replayed again.

  • mandevu

    mmmh who are you