Bond notes, Rands divide opinions in Zimbabwe

FINANCE minister, Patrick Chinamasa and Reserve Bank of Zimbabwe governor, John Mangudya are strong-willed individuals.

In the face of mounting opposition to their plan to introduce a surrogate currency known as bond notes, which critics have argued is a ploy to bring back the Zimbabwean dollar through the back door, the duo have put on a brave face and rolled out the bond notes that will start circulating today.

Indications are that the bond notes will continue to divide Zimbabweans and opposition to the introduction of the currency will continue, even with their forced introduction.

Tourism minister Walter Mzembi remains the lone voice of reason in President Robert Mugabe's government, arguing the introduction of the surrogate currency will spell doom for his sector.

Mzembi has called for the adoption of the South African rand as a solution rather than printing the bond notes.

While Zimbabwe's economy continues on its downward spiral, the tide continues to rise against the notes, but Mangudya and Chinamasa have obstinately pushed on.

"The bond notes shall be introduced by the end of the month, as we have been advising. Bond notes will operate within the multi-currency system, where citizens have a choice to withdraw from their bank accounts legal tender of choice from US dollars, rand, euro or bond notes," Mangudya said last week, before, at the weekend announcing that the surrogate currency will be in circulation today.

Mangudya threw the gauntlet at his critics, challenging them to "bring alternatives rather than just shout".

"Those that are arguing against bond notes must bring alternatives on the table. We cannot continue with this monologue that bond notes are bad. We cannot be expected to fold our hands and watch the economy go down.

"We have met with these groups as a way of interaction and our doors are open for continuous engagement. This has helped, in a way, sharpen our programmes and policies, but it has never been an indication of government's willingness to reverse the introduction of bond notes," the apex bank chief said.

University of Zimbabwe lecturer and economist, Ashok Shakravathi said Zimbabwe must adopt the South African rand.

"There is a much better strategy, the most important of which is to adopt the rand. We do not need to talk to the South Africans, but just do as we did with the US dollar. It is a fact that in 2009, about 60% of the currency circulating in the economy was the rand and we can adopt that currency informally.

"All prices should then be charged in rands and Chinamasa's budget should also be in that currency. That way we can bring stability into the market," he said.

Arch-government critic and opposition People's Democratic leader, Tendai Biti accused the government of outright theft and bringing bond notes as a stop-gap measure to cover "their corruption".

"We have to analyse why the bond notes are being foisted on Zimbabweans. This is a way of trying to fill a big hole they have created by stealing depositors' money kept at the central bank.

"Now they want to force people to all use plastic money. They are creating hot money through the use of debit cards. They want even the woman selling tomatoes to have a debit card," he said.

"We all live under the illusion that we have money when in actual fact we do not. The solution is political. We are tinkering with the deck when the Titanic is sinking."

Biti said adopting the rand would not solve the country's problems.

"Some are arguing that we adopt the rand, but they will just bastardise it as they did with the Zimbabwe dollar, the US dollar and the bearers cheques. In the end, we will likely move on to the naira, but that is not a solution.
We need political solutions and the national transitional authority will be a giant leap in the right direction," the former Finance minister said.

Social activist and Tajamuka front-man, Promise Mkwananzi argued that authorities were getting it wrong and instead of concentrating on the currency issue, Zimbabwe needs to deal with its poisoned policy environment.

"The argument that we have not given alternatives is as lame as the authorities are chasing the wrong things. They need to deal with the investment environment, repeal the indigenisation law and such other toxic legal statutes that have kept investors away," he said.

MDC-T spokesperson, Obert Gutu said Mangudya and Chinamasa represent an uncaring State that can afford to ignore the people's views.

"The Zanu-PF regime has never, ever cared about the interests of the majority of Zimbabweans. From 1980, President Robert Mugabe has been obsessed with the politics of power retention at whatever cost.

Political commentator, McDonald Lewanika said the government's "pigheaded" response to protests and arguments against bond notes pointed to a sinister motive behind the surrogate currency. He said the decision by the government to introduce bond notes, despite counsel on its disastrous effects economically, was self-serving.

"The insistence shows that they are a lifeline for the government and because of those myopic interests it will serve in the short run, they are prepared to do long term damage to country's economy," Lewanika said.

That, unfortunately, is not new and is the bane of Zimbabwean politics, which is a tragic story of how those in power serve no one but themselves, and listen to no counsel other than theirs - the challenge of people in power to serve myopic partisan interests rather than to represent the people and facilitate long term development and economic growth for the country.