Bond notes will remain in circulation until Zimbabwe introduces its own currency, Finance and Economic Planning Minister Patrick Chinamasa has said. Responding to questions on the fate of the bond notes after media reports claimed they will be phased out, Minister Chinamasa said the introduction of a local currency will mark the end of bond notes.
“Nowhere did the Deputy Minister (of Finance and Economic Planning Terrence Mukupe) say the bond notes are going to go away and that is the sort of negativity that is not going to get us anywhere,” Minister Chinamasa said at a breakfast meeting in Harare yesterday. It’s not true; bond notes will stay until we have our own currency and the Governor (of the Zimbabwe Reserve Bank of Zimbabwe) and myself have been at pains to spell out the macroeconomic fundamentals that we need to put right before we can do that.
“We need to address the budget deficit; we need to address the issues of exports and we need to build foreign currency reserves of at least three months, at the moment we are at 0,7 months,” the Minister added. Minister Chinamasa said the country needs to boost production.
“This is why we are coming up with all these proposals or incentives to incentivise production so I just want to plead with you, please let’s look at the positive side, let’s not dwell on the negative, let’s not be driven by some of the falsehoods that are peddled through social media. You are intelligent enough to distinguish between an obvious falsehood and that which may have credibility,” he said. Minister Chinamasa said Government was working on a cocktail of measures to improve the economy.
For instance, Government has more than doubled export incentives for tobacco producers to 12, 5 percent, from 5 percent. Gold producers will also be prioritised in the export incentives. Gold and tobacco, Chinamasa said, contribute 86 percent of export receipts.
Minister Chinamasa said Government is also cutting down on expenditure to reduce fiscal deficit. Government is also rationalising expenditure on wages and at the same time grow the economy to ensure recurrent expenditure finds its right proportion within a bigger cake. Minister Chinamasa said Government is normalising relations with the United Kingdom, The European Union and the United States. The key, he said, is normalising relations with the United Kingdom.
Moreover, an investor friendly environment is being created. The huge RTGS balances, Minister Chinamasa said, are going to be used for infrastructure development and to fund the production. Minister Chinamasa also commented on the country’s arrears clearance plan which he said is still on course.