News / National
Zimbabwe Army ordered to embrace controversial bond notes
04 Nov 2016 at 12:26hrs | Views
Amid a rapidly deteriorating economy and rising social unrest over cash shortages that have seen people sleep in bank queues, Zimbabwe Defence Forces (ZDF) commander General Constantino Chiwenga has ordered the military to embrace controversial bond notes set to be introduced this month despite growing discontent over the surrogate currency.
Zimbabwe is in the grip of a serious cash crunch, which has worsened gradually since December last year due to dwindling exports and weakening regional currencies.
The International Monetary Fund resident representative Christian Beddies on Wednesday warned that Zimbabwe has lurched into a serious economic crisis over the past two months due to policy inconsistency.
Informed sources told the Zimbabwe Independent that Chiwenga has for the past two weeks embarked on a cross-country commander's visit to all cantonment areas where he spoke at length on issues, including the history of Zimbabwe, welfare of troops and the payment of allowances and annual bonuses.
The last time he made similar visits was in 2009 when Zimbabwe ditched its local unit for the United States dollar.
Sources said Chiwenga, while addressing the soldiers, took a dig at former vice-president Joice Mujuru for challenging the legality of the bond notes. He said servicemen should not speculate over the monetary intervention that has already triggered a public outcry.
Chiwenga's visit coincided with a public awareness campaign on the introduction of bond notes being carried out by the Reserve Bank of Zimbabwe (RBZ).
In September, the Constitutional Court threw out Mujuru's case with costs, dismissing it as premature and speculative. To avert a looming crisis, Mugabe on Monday invoked his Presidential Powers (Temporary Measures), gazetting Statutory Instrument 133 of 2016, giving effect to the introduction of bond notes.
Chiwenga's visits, sources said, have taken him to Magunje barracks (where he flew on Monday), Inkomo garrison, 1 Commando (Tuesday), KG VI and Suri Suri Fylde Air Base near Chegutu.
When reached for comment, ZDF spokesperson Overson Mugwisi requested for written questions. He had not responded to those questions at the time of going to print.
Low nostro account balances and a surge in government borrowings last year triggered a biting liquidity shortage that has resulted in panic withdrawals.
Chiwenga, the sources said, also told the troops that Treasury would pay them their annual bonuses and allowances. He further assured them that there would be no salary cuts. This is in sharp contrast to remarks made by Finance minister Patrick Chinamasa during the presentation of the Mid-Year Fiscal Policy in September.
The army chief has also used the meetings to inform the military that the ZDF will next year recruit general duty soldiers and officer cadets, a development that could throw off track the government's plans to reduce the public sector wage bill to 60% from the current 96%, sources said.
In 2013, government froze the recruitment of general duty soldiers and other personnel in a desperate bid to create fiscal space on the back of sagging revenues.
Last month, the central bank said the bond notes would be brought into circulation at the end of October and a measured approach would be adopted to gradually increase the total stock of the surrogate currency to about US$75 million by year-end.
The bond notes, the central bank said, were meant to ease cash shortages, plug externalisation and money laundering after it reported that nearly US$2 billion was siphoned out of the country last year.
The public has in recent months protested the introduction of the bond notes, saying this is a ploy by the broke government to introduce the discredited Zimbabwe dollar through the backdoor.
Source - the independent
