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Wheels come off Chinamasa's mystic wagon, the bond note myth is exposed

by Jacob Mafume PDP Spokesperson
06 Sep 2017 at 19:31hrs | Views
The wheels have come off Chinamasa's mystic wagon, the unorthodox attempt to get around fundamental rules and principles of economics have failed, his cosmetic fiscal tactics are finally exposed as we have always argued.

In Chinamasa and Mangudya we have the worst Finance Minister and Governor of the Reserve bank respectively.

The Daily news yesterday reported that the bond note's value has ‘tumbled' against the dollar with ratings of around 50% percent on the black market. The People's Democratic Party has always argued that exchange rates cannot be controlled by totalitarian pieces of legislation.

We have argued before that a currency is a reflection of a country's exports against the imports.

We argued then, as we do now, that a currency is a reflection of a country's social contract or its absence thereof.
An abused citizen rejects the authority of the government, they reorganise their lives around informal spheres and the currency becomes an immediate casualty.

Devaluation vengeance has intensified after the latest injection of 300 million dollars' worth of Treasury Bills.

A huge salary bill resulting from ZANUPF's recruitment of ghost workers as part of its election machinery has made it impossible to maintain a primary balance ,as a result the government failed to tick the minimum benchmarks set in the Staff Monitored Program of the IMF.

Chinamasa and Mangudya, in November last year, made an ill informed decision to cover for their reckless raid of RTGS balances and NOSTRO accounts at the Central Bank.

We argued then that the bond notes would cause distortions in the markets which will drive inflation upwards as well as displace good money.
  • United States dollars are now being sold at a 36% premium for individuals buying through electronic transfers like RTGS.
  • A 30% premium is on the bond note against the United States Dollar for cash purchases.
  • The Old Mutual Stock Market share price in Zimbabwe implies a 30% premium against the Johannesburg and London stock markets.
  • Prices of imported stock are now being revised daily, a clear sign of the instability created by the pseudo currency.
  • Quotations on imported stock are now valid for only 24 hours thereafter they are subject to review.
  • Businesses are now forced to pay suppliers immediately to avoid the loss of their profit margins.
  • Companies are now reluctant and unable to owe foreign suppliers as they risk defaulting due to the unstable exchange rates and unavailability of foreign currency.

The bond notes induced premium has resulted in the spiralling of production costs, to avoid losses companies then shift the price and burden to consumers who now bear the costs despite having low disposable income due to dire economic conditions.

The People's Democratic Party advises against the injection of a further 300 million worth of bond notes as this will deepen the crisis.

Instead the use of the bond notes must be scrapped but more importantly Chinamasa and Mangudya must just accept failure and resign.

We are however aware of the fact that resignation is not part of ZANUPF's DNA the people of Zimbabwe must assist Chinamasa and ZANUPF by relieving them of their duties.

Together Another Zimbabwe is Possible

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Source - Jacob Mafume - PDP Spokesperson