Bond notes 'a PR disaster' for Zimbabwe

THE bond note poses an international public relations problem for Zimbabwe close to two years after its introduction, clouding the country's efforts to entice international investors, a financial analyst at South Africa's Rand Merchant Bank has said.

The bank's Africa analyst in the Global Markets, Neville Mandimika, told The Financial Gazette that despite the significantly improved international perception, there was still confusion around issues such as bond notes.

"The big concern is around policy coordination. I think there is a perception out there that with some of the policies that are being put across, say special economic zones, bond notes, that it is almost reactionary and not strategic in a sense.

"So what these guys are looking for is: Where is the country going to be five, 10, 15 years down the road. More importantly, it would be around the issues of the FX (currency market) regime, where are the bond notes going to be over the next five years and more importantly, (is it) a policy that's here to stay. It is more to do with a PR exercise to give investors comfort that with this currency in place, with these policies in place, this is how you can transact. So I think there is still a bit of confusion in terms of where the FX regime is," Mandimika said.

He said on the international scene, the phrase bond notes conjured up images of fixed income investments. "If you typically mention bond notes to someone who is in New York or Washington, it means something completely different to what it means to us here in Zimbabwe, so typically when we talk to clients and you mention bond notes, they are thinking in a completely different direction.

"It is something that is not well understood or articulated at this stage. Hence the need to actually do a PR exercise in terms of understanding what it is, what the objectives are and more importantly whether it's here to stay or not because it's not readily understood out there."

Mandimika, who was in the country for a real estate investment conference, said Zimbabwe should take advantage of changing international sentiments and strengthen its policies.

"The prospects are much higher now because the conversation is not so much that Zimbabwe is going to be a basket case for the next three to four years but rather what the economy is going to look like after July. So the conversation is beginning to turn.

"Be that as it may, there are some policies that still need to be clarified, some positions that need to be made clear, to meet the expectations of investors. Right now the sentiment is on our side but we need to ensure that the policy proposals being debated and put forward are going to be made extremely clear, at least after elections," he said.