Reject bond notes at your own detriment, says Chinamasa

FINANCE minister Patrick Chinamasa yesterday claimed Zimbabweans will reject bond notes at their own peril, as their families and businesses will be negatively affected by such a snub.

Responding to Binga North MP Prince Dubeko Sibanda (MDC-T) in the National Assembly during the question-and-answer session, Chinamasa said Zimbabweans should have confidence in the surrogate currency.

The Finance minister had been asked to explain how the value of bond notes would be maintained at a rate of one-to-one with the United States dollar in the face of fierce resistance by the market.

"You are correct in saying that the value of any currency is supported by confidence, and everyone accepts the US dollar even if it is not supported by gold. But it is supported only by confidence, which is important to restore whatever we are going to do," Chinamasa said.

"We need confidence in whatever we are going to do because if you do not accept the bond notes, you do it at the peril of your families and businesses and it is important for the nation to give bond notes confidence because if you do not, business will collapse due to lack of US dollars in the market."

He said bank deposits now stood at $6,3 billion, but this was not in the form of physical cash.

"We have to use foreign currency to import US dollars from the United States, which we then use to buy important things. There is no other country on the continent which uses US dollars to pay salaries and for buying tomatoes and mazhanje (indigenous fruit)," Chinamasa said.

Asked by Hatfield MP, Tapiwa Mashakada (MDC-T) to explain if bond notes were the ultimate solution to Zimbabwe's liquidity crunch, Chinamasa said it was an incentive for exporters, adding they would also address issues of capital flight.

"If we invest $3 million into the market, it will all go through a sieve and we cannot afford that," he said.

Chinamasa said the International Monetary Fund, World Bank and African Development Bank were not the panacea to Zimbabwe's economic challenges.

He said the responsibility lay with Zimbabwe to create a conducive environment for both foreign and domestic investment.

Kuwadzana East MP, Nelson Chamisa (MDC-T) asked Chinamasa if there was any guarantee that export earnings in accounts of bond notes would not be externalised.

"It is like prescribing Norolol (malaria medication) to an HIV-positive patient. Right now, the issue of bond notes is affected by lack of confidence, and how are you going to cure the question of lack of confidence through introduction of bond notes?" Chamisa queried.

Chinamasa said bond notes were not being introduced to build confidence, but to enhance exports and foreign currency.

"We are saying, any foreign currency earned in Zimbabwe, is going to be liberalised in terms of its usage and we are no longer going to allow foreign currency to buy trinkets," he responded.

Parliament is soon expected to craft the Reserve Bank of Zimbabwe (RBZ) Amendment Bill, which will make provision for the introduction of bond notes.

The august House has already asked for written submissions from the public on the Bill.

But according to the newly-gazetted RBZ Amendment Bill 2016, people who deface bond notes could face imprisonment of up to seven years.