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Sydney Kawadza Senior Features Writer —
Any poll on most trending issues in Zimbabwe for 2016, across all media platforms, would easily pick the proposed bond notes story as the obvious winner. Even private discussions, whether social, political or religious, usually ended with the subject of bond notes.

Not keen to be left out of the trending bond notes discussion, the clergy have also joined in with Prophet Healing and Deliverance Ministries head Walter Magaya leading the pack.

But, of all discussion platforms, the social media has ruled the roost. This year has seen the sprouting of a number of faceless social media accounts being created, with some going to the extent of spreading unwarranted diatribe on the Reserve Bank of Zimbabwe Governor Dr John Mangudya, and other leaders of Government.

Their crime, introducing the bond notes.

Some have continued to advance the narrative that bond notes are a clandestine way of reintroducing the moribund Zimbabwean dollar, despite that, not only the monetary authorities but Government at large, have ruled out the return of the Zimdollar, at least in the near to medium term.

Others, on social media, claimed that there would be no guarantee that the RBZ would stick to the US$200 million cap, as the band can easily run the printing machines.

A video mimicking a bond note and a US dollar arguing about the value of the former was also widely circulated. This emanated from the argument advanced by the campaigners against bond notes that the tender does not possess the same value as the Benjamin.

Some have gone to the extent of calling anything of perceived “fake” quality as a bond note. A joke spread widely on social media of why the referee in the match between the Mighty Warriors and Egypt ruled out Zimbabwe’s effort because it was a “bond goal”.

This goes to show that social media has become a new complex phenomenon authorities, not only in Zimbabwe have to deal with. More importantly, because the fertile minds of some characters, seems to be wetted by foreign forces that fight anything from Zimbabwean authorities.

Also, it brings out the question on the role being played by the social media, especially those against the bond notes. But from the details provided by the apex bank, Government, through the Ministry of Finance and Economic Development, some arguments being proffered on social media are rather unfortunate.

Dr John Mangudya has already announced that US$75 million in bond notes will be injected into the economy by next week. This, he said, followed the completion of finer security features and national public awareness campaigns of the new legal tender.

The tender, already ring fenced with supporting legal instruments, is meant to incentivise exporters and ease cash shortages. Dr Mangudya told our sister paper, The Sunday Mail, that all required procedures and legal instruments were in place ahead of the roll-out of exporters’ bonus incentives.

The bond notes are expected to bring liquidity into the economy while making transacting easier. Bond notes derive their value from the US$200 million Afreximbank facility.

The notes will be released in denominations of 2 and 5 while being pegged at 1:1 with the US dollar. However, their introduction has been met with mixed feelings that the monetary authorities have been put in a corner over the introduction of the bond notes.

But, how can a people, Zimbabweans for that matter, claim the US dollar as their currency? Under normal circumstances it would be expected that a people would take issue with the imposition of a foreign currency ahead of a local tender.

Not the case we have now that Zimbabweans prefer to go into the streets to campaign against a local solution choosing rather to stay hounded and leashed on a foreign currency over which neither monetary authorities nor those campaigning for it have control.

Monetary authorities should be able to control and monitor interest rates, for instance, but cannot do so on a foreign currency whose value is determined elsewhere.

While we cannot wish away the imminent arrival of the bond notes, the monetary authorities have a huge task to find ways of fighting the social media negativities especially malcontent bent on destabilising a functioning system.

The central bank, through its awareness campaigns should make it clear that bond notes are financial instruments guaranteed by an the Afreximbank to the tune of US$200 million, issued at par with the US Dollar (1:1).

The bank should also clarify that bond notes are issued as an incentive to exporters of goods and services and are available for use by the transacting public within Zimbabwe.

According to the RBZ, bond notes, just like the currencies of the Common Monetary Area which include South Africa, Namibia, Swaziland and Lesotho, whose currencies are pegged 1:1 with the South African Rand, are not legal tender outside their borders.

Again, this will help in the fight against externalisation and the RBZ believes that since the bond notes are local financial instruments which can only be used for transactions in Zimbabwe, hence cannot be externalised.

This would free up other currencies in the multi-currency system to be used for foreign transactions. Bond notes will be redeemable for US dollars or any other currency within the multi-currency basket.

The bond notes can be redeemed for US$, ZAR, Euro, Yen, Australian dollar, Yuan, Pula and Rupee at any bank or any Easylink Branch of Homelink. Therefore, this effectively means the public has a choice of either keeping or transacting in the bond notes or converting them to other currencies when the need arises.

The RBZ says the notes are not Zimbabwe dollars for they are not a currency but financial instruments. They will be used as medium of exchange in the same manner that bond coins are being used. They will be available for use by the transacting public.

The awareness campaigns should make it clear that Government cannot print more notes in excess of the US$200 million facility because the bank can only issue bond notes against export performance up to that cap.

The monetary authorities say the bond notes will remain in existence as long as the facility guaranteeing their existence is in place. Furthermore, the bond notes will remain in circulation as long as the economic fundamentals required to issue a local currency are not in place.

To ensure transparency in the issuance and management of bond notes, the bank is putting in place an independent body to monitor issues and information relating to bond notes.

Another important policy position that the RBZ should hammer is that bond notes are also an anti-money laundering tool that is useful in guarding against externalisation of the already scarce US dollar.

The notes, to be released only in 2 and 5 notes, will compliment bond coins in dealing with issues of change and small purchases of goods and services.

The small denominations were considered after taking into consideration the public’s concerns, fear, anxiety and scepticism surrounding bond notes which are all about trust and confidence within the economy.

Another falsehood maliciously generated on social media which the authorities are battling to douse is that workers in Zimbabwe would now be paid their salaries in bond notes.

Banks have an option to pay cash withdraws in any one of the legal tenders in the multi-currency basket depending on availability. While a foreign hand can be identified in the fight against the introduction of bond notes, the public’s anxiety is to an extent understandable.

The flip flop to release the bond notes since the announcement was made a couple of months ago and the failure by the authorities to announce a specific date for their introduction somewhat created unnecessary uncertainty among the transacting public.

This gave rise to speculation, fuelled mainly by social media, and this has led to consternation across the country. Also worrying is that the RBZ has continued to change dates of release while the liquidity crunch continues to bite and ordinary Zimbabweans have had to draw own conclusions.

Although Governor Mangudya said the delay in releasing the bond notes was due to the need for a massive awareness campaign, this has not been well received.

It is the anxiety that has been hurting the economy as it also brings uncertainty. With social media ragging, potential investors both local and foreign, naturally take a wait and see attitude.

Social media is unbridled to such an extent that it can spark widespread pandemonium. For instance, this week there were reports of fuel shortages blamed on the imminent arrival of the bond notes.

But Dr Mangudya immediately dismissed the speculation saying the reports were unfounded.

“It has come to the attention of the Reserve Bank of Zimbabwe that there are some social media stories peddling about fuel shortage in the country. Such reports are unfounded and meant to cause unnecessary panic,” he said in a statement.

The RBZ chief also dismissed reports of a meeting held between fuel suppliers and the RBZ on Friday last week adding that fuel companies are being allocated foreign exchange on weekly basis to meet their monthly requirement. Zimbabwe needs about US$50 million a month for fuel.

“Consumers should treat such social media reports with the contempt they deserve as this is not the first time it has happened.

“The RBZ and banks continue to put priority on foreign exchange utilisation to the importation of fuel, electricity and raw materials for the manufacture of basic commodities.

“This is why it very critical to incentivise exporters of goods and services in order to earn more foreign exchange for the above critical imports.”

Governor Mangudya’s statement has also been supported by the Energy and Power Development secretary Mr Patson Mbiriri who dismissed reports that Zimbabwe was on its last drops of fuel.

“The country has fuel stocks to last us well into next year. The stocks are in NOIC storage tanks and depots. The country has one of the highest fuel storage capacities in the region which is reasonably stocked.

The critical fact to appreciate is that the bulk of these stocks are in Bond. Once such fuel is paid for, it is released on to the market forthwith. Unlike in the past where such fuel was primarily stored in Beira, the bulk of it is now stored in the country.

The RBZ says it has also put in place some measures to deal with externalisation of cash, including limits on the amount of cash which can be exported by a person.

It further says bond notes will not have a negative effect on the Export Incentive Scheme because they are primarily an export incentive.

The Bank indicates that the notes which would be introduced to support exporters are a necessary export incentive/bonus scheme aimed at encouraging domestic production for export, especially given the external shocks of low international commodity prices and the strong US Dollar.

Authorities also argue that the economy has to generate liquidity in this uncompetitive environment while at the same time ensuring that the incentive is preserved from externalisation by unscrupulous businesses.

The RBZ should also aggressively pursue the use of plastic money and ensure that service providers have acquired POS machines. That way, convenience to the transacting public will encourage use of plastic money.

In that sense, the bank must constantly engage the financial service sector to reduce transaction fees to allow for use of plastic money.

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