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Dr Mangudya

Robert Zhuwao Correspondent
Zimbabweans have experienced in our lifetime things that would have led others to nervous breakdowns, but we have remained strong and resolute. As a result of the liquidity crunch, Government has proposed to introduce $200 million worth of bond notes supported by an Afreximbank facility for the same amount.

Contrary to what some sceptics would want the public to believe, the notes are being printed outside Zimbabwe.

This should put to rest fears that the Reserve Bank of Zimbabwe may print more bond notes than what the facility covers.

Given our experiences of the past hyperinflationary Zimbabwe, many will worry of the torrid past that history could be repeating itself.

Hence the wariness by most Zimbabweans in warming up to the bond notes.

The media were awash with the reports of Hon Joseph Chinotimba’s query as to why Government opted for bond notes as opposed to bond coins with a higher denomination than current.

While some may have poked fun at the legislator, I felt he was presenting an alternative as seen by the ordinary rural folk in most constituencies who even after the introduction of the multi-currency system, had no access to hard currency.

They had adopted the South African Rand which has since virtually stopped operating as Zimbabweans seem content with the US dollar.

Introduction of the bond coins did not meet as much resistance compared to the bond notes mainly because bond coins are convertible to the US dollar at 1:1 and to the other multiple currencies at the prevailing exchange rate.

It is a wonder why so much resistance to an amelioratory measure that benefits all given the cash shortages the nation has been experiencing. More awareness programmes need to be carried out to comfort a doubting population.

The advantages to businesses need to be explored and businesses supported towards unlocking the values out of the potentials.

Zimbabwe has become prime hunting ground for hard currency for foreigners in search of it.

That is why the country has a large foreign contingent operating in the reserved sectors for locals in the economy.

Added as a 5 percent export incentive, the introduction of the bond currency should go a long way towards curbing the forex outflows and improve liquidity.

The Governor of the Reserve Bank of Zimbabwe Dr John Mangudya last month assured business that no hard currency accounts would be converted to a softer currency.

Incentives to encourage businesses to accept the bond notes need to be availed to get their total buy-in.

While it may appear expensive in the initial stage, it is not businesses fault for the current situation; lack of policy implementation support has contributed in a large way. Business is a victim of circumstances.

An option worth exploring to get society buy-in on the bond currency would be to consider all utility bills, electricity, salaries and local statutory obligations to be paid in soft currency.

The current liquidity scenario is resulting in a change of Zimbabwe society norms through the introduction of plastic money.

Slowly, the nation is moving towards the increased use of plastic money.

Accordingly, retailers, businesses, government departments and informal sectors among others, are now required to install and use point of sale machines.

This move should unlock liquidity in the banks enabling banks to create credit facilities.

The financial sector needs to consider the availing of loans to export businesses and accept off-take agreements as security for the loans as most small to medium enterprises do not have immovable property to cede as security.

A deliberate mindset towards combined team effort encompassing business trust needs to be built between banks and customers.

The need for a united local business and finance sector will become beneficial for both and the economy in the long run.

The enactment into law of the Consumer Protection Bill will go a long way in bridging the relationship and reduce gap deficiencies between banks and business.

There is need to develop and enact into law the Buy Zimbabwe Act.

The Act should stimulate manufacturing and buying of local products obviously with set minimum content regulations.

Value addition on local minerals and/or produce needs to be encouraged and rewarded to enable more viable pricing of Zimbabwean minerals and produce.

More export incentives need to be availed for exporters as the world over, export incentives have enabled other countries to supply products cheaper than the domestic made products.

Policy implementation needs to be better coordinated between line ministries as locals have become spectators in their own economy partly due to loopholes in policy implementation. Export earnings attainment can only be achieved coupled with funding to kick start operations.

Given that local capital is not enough for Zimbabwe re-industrialisation, the country is forced to rely on FDI’s or external capital.

Zimbabweans based in the diaspora need to be engaged on a business basis to participate in sound investments back home.

The cost of doing business for Diasporans needs to be simplified and made more attractive for their participation. Policies encouraging the need to invest in projects that can earn them revenue in dividends to subsidise their families in Zimbabwe need to be crafted to relieve dependency on their wage/salary abroad.

Under the right conditions, there are Zimbabweans willing to invest in the rebuilding of Zimbabwe’s economy.

These are people not requiring politicking but straight business talk and incentives to give them comfort for their investment.

Robert Zhuwao a businessman and National President of the National Business Council of Zimbabwe (NBCZ), a registered NGO lobby group, think-tank, demand based training, capacity building institute for indigenous business development. He can be contacted on. Email. [email protected]