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VP Mnangagwa

VICE President Emmerson Mnangagwa last week rightly implored Zimbabweans to have confidence in Government whenever it comes up with a plan of action for socio-economic development.VP Mnangagwa was responding to comments from certain quarters that the planned introduction of bond notes was a ploy by the Government to re-introduce, through the backdoor, the Zimbabwe dollar scrapped in 2009 at the height of hyperinflation.

He reiterated what the Reserve Bank of Zimbabwe has said in the past that the bond notes were only an incentive for exporters to generate more foreign currency for Zimbabwe.

We believe the bond notes, which are backed by a $200 million facility from Afreximbank, are a plausible and innovative initiative, as they can incentivise exporters to generate more forex, which will improve liquidity in Zimbabwe.

It is also worth noting that bond notes will stem the incessant outflow from Zimbabwe of the little stock of the US dollar, a much sought after global reserve currency, which is partly the reason we are mired in this liquidity crisis.

However, while most of us know fully well that bond notes are a policy initiative well meant to resolve the shortage of hard currency and turn around the economy, it is the deafening silence of the central bank on progress, which is fuelling misconception on the matter.

This comes as we are only a few days from the end of the month when the bond notes are expected to be introduced, yet there is little or no update on how far we have gone in meeting the set timeline.

Considering the importance of such an important policy measure, the Reserve Bank should have been running frequent media updates or issuing statements on progress, exact dates and process of implementing the initiative.

Its silence on the issues has been partly responsible for the many negative theories that have been circulating on the potential impact, purpose and time when the bond notes are expected to be introduced or come into circulation.

While differing views and opinions are bound to emerge whenever a major policy action or decision is announced, authorities have a duty to regularly issue official statements explaining the situation around the issue.

Uncertainty, due to information gaps, misconceptions and deliberate attempts by people with ulterior motives, creates undue apprehension and promotes gossip that negatively affects the smooth implementation of policies.

It was heartening to hear VP Mnangagwa assure the Zimbabweans that bond notes are not an attempt by Government to bring the Zimbabwe dollar back into circulation before the macroeconomic fundamentals are ripe.

According to RBZ, the bond notes are supposed to come into circulation at the beginning of next month, as an export incentive of 2,5 percent and 5 percent to different classes of exporters to encourage export-led growth.

The bond notes, which will rank equal per unit to the US dollar, will be introduced progressively in denominations of $2, $5, $10 and $20. However, the bond notes will be accepted as legal tender only in Zim- babwe.

RBZ Governor Dr John Mangudya is on record as saying the bond notes will not substitute any currency, but will circulate alongside other approved currencies in the multi-currency basket that include US dollar, South African rand, Botswana pula, British pound and Chinese yuan.