Chinamasa,Kombo Moyana clash over bond notes

FINANCE minister Patrick Chinamasa continues to take brick-bats from Zimbabweans across the political divide with respected former Reserve Bank of Zimbabwe governor Kombo Moyana the latest high-profile person to tell the government it is lost.

Chinamasa almost blew his top during a heated public discussion organised by the Southern African Political and Economic Series (Sapes) Trust on Thursday, where economists argued against the re-introduction of the country's comatose currency.

Moyana, Zimbabwe's first black head of the apex bank, told the discussion that while he was in agreement with authorities regarding plugging of cash leakages, the bond notes would be no solution.

"I do not know if we are heading in the right direction by introducing the bond notes. Our salvation is in think-tanking, Zimbabweans are respected globally and I do not see why we cannot tap into that to spur exports. That should be the way out, exports and more exports and not bond notes," Moyana said.

He was supported by Bank of Zambia ex-governor Caleb Fundanga.

"Confidence in the Reserve Bank is important because people have to believe whatever pronouncement is made will be sincere. I do not know if it is the right time to introduce the local currency or bond papers," Fundanga said.

Chinamasa did not take lightly to it and accused his audience of coming to the meeting with "closed minds".

"I want to make it very clear: We are not introducing the national currency. Our people do not want to hear it. But we should not be prisoners of the past. Some of you are not open to discussion. Bond notes are the elder brother to bond coins. They are here to stay and will be around until we re-introduce the Zimbabwe dollar at the appropriate time and when the fundamentals are in place," Chinamasa retorted.

Moyana said he was perplexed to see government taking a leisurely approach to the country's crisis.

"In my time working with Bernard Chidzero (former Finance minister), we made sure our wage bill was maintained at 20% of government income. We would shiver if it approached 25%, but now people go to sleep when it is at 83%. No country or institution can survive when it is using 83% of its income to pay wages," he said.

Economist Ashok Shakravarti told Chinamasa: "The market views the bond notes as a re-introduction of the Zimdollar.

Even industry and commerce would rather have a 3% tax on imports than these proposed bond notes. The issue is about creating confidence in the market and that cannot be achieved by introducing the Zimdollar."

And another speaker, Caleb Dengu, painted an even scarier picture describing the move to introduce the local currency as a threat to national security.

"People have been mugged by this economy before and cannot risk walking that route again. Zimbabwe has a country risk, but until the announcement that government would be introducing bond notes, we did not have a currency risk," Dengu said.

But Chinamasa accused Dengu of blowing things out of proportion and seeking to cause anarchy.

Chinamasa argued "the market will be the final arbiter".

"We are doing this in good faith and will keep our options open. Nothing is cast in stone regarding the policy pronouncements we have made, but we must make sure whatever we say, we are aware of our unique situation as a country," the Finance minister said to murmurs of disapproval.