Zimbabwe's bond notes to be printed in Germany

The $200 million worth of bond notes that will be used to incentivise exporters will be printed in Germany, a Reserve Bank of Zimbabwe official has said.

RBZ director for Exchange Control Morris Mpofu told delegates to the Chamber of Mines meeting in Victoria Falls yesterday that government had engaged the same company that was used by the South African Reserve bank to print the rand.

"The same Germans who printed the South African rand which were recently impounded at Harare International Airport and later released are the ones who are printing the notes," he said.

Mpofu said the introduction of bond notes, which are backed by a $200 million facility by the African Export-Import Bank, was not supposed to be a cause for concern since the facility was not permanent but had a limited lifespan. "The incentive will come and go, we hope that by the time it expires it would have brought in $4 billion," he said.

He said it was critical to note that the bond notes were a minute percentage of the deposits that the country was holding. "If you look at this facility it's very little to warrant the return of the Zimdollar," he said. He said it was critical for people to understand how the facility would work.

"If, for instance, you export goods worth $10,000, when the money is paid into a nostro (foreign) account and your bank credits that money to your account, the RBZ will credit five percent export incentive (worth $500) in bond notes to your account so that your balance will be $10,500. There's no separate account for bond notes and US dollars," said Mpofu.

"If you then go to the bank and get bond notes, you can easily exchange them at any Homelink offices. So there's no need for alarm," he said.

Meanwhile, Mpofu said the new measures introduced by the central bank, including limiting of daily cash withdrawals of $1, 000 per day or R20, 000 for individuals and drawing up of an import priority list, were justified in view of the externalisation of millions of dollars by both locals and foreigners.

"We know of three foreign nationals that camped at a five star hotel in Harare, withdrawing $3, 000 per day for 30 days," he said.

"They then slipped out of the country with about $500, 000 after bribing people at the border," he said.

"We've been too generous on withdrawal limits because apart from businesses and some business people, very few Zimbabweans earn $3,000 per month," he said.

Mpofu said there was also the issue of about 280 Zimbabweans named in Panama Papers accused of externalising millions of dollars.

"We're not saying all of them are guilty because we had relaxed foreign exchange controls but we're surfing through that list," he said.

Mpofu admitted that the introduction of the multicurrency regime in 2009, which is credited for stabilising the economy, had brought with it challenges like opening up the financial system to international criminals.

"The challenges that we face are that when we liberalised the economy, we opened up and became a safe haven for international criminals as well, with Zimbabweans also becoming ill disciplined. Zimbabwe has become a fishing pond of currency," he said.

The RBZ's head of financial markets division Azvinandaa Saburi said the bank was expediting the use of plastic money by encouraging business to increase the number of point of sale machines. He said they were also engaging banks on charges for POS transactions.