LOCAL economic analyst, Believer Mhlanga has urged Zimbabweans to invest in assets in order to hedge against government’s planned introduction of bond notes and avoid losing their life savings, as happened in the 2006 to 2008 period.
BY MTHANDAZO NYONI
Speaking at a Zimbabwe Coalition on Debt and Development (Zimcodd) public finance management-students forum in Bulawayo on Saturday, Mhlanga said Zimbabweans should develop a culture of investing in assets.
“As the public, we should invest in assets and participate fully in the financial and economic aspects of the country to raise our voices high,” he said.
Mhlanga’s sentiments come at a time the Reserve Bank of Zimbabwe (RBZ) has announced plans to introduce bond notes backed by a $200 million African Import and Export Bank (Afreximbank) bond facility.
However, a highly sceptical public is viewing the latest move by RBZ, as a backdoor introduction of the Zimbabwean dollar.
Mhlanga said since the government was going ahead with its plans to introduce bond notes, it should involve the public in awareness campaigns to assure their buy-in.
“The success of the facility depends only, but not solely, on the acceptability characteristic of money and store of value, the latter can be easily archived due to the pegging of the rate,” he said.
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Mhlanga urged the public to use plastic money, a generic term for all types of money represented by bank cards.
Mhlanga said the government should facilitate and implement industrial cluster zones and cut down drivers of costs, such as electricity, wages and water to boost production levels.
“(There should be) decentralisation of some government activities for easy public finance accountability (and) repositioning the country in the financial markets to attract foreign direct investments (FDIs),” he said.
“Reduce corruption, which curtails progress. The stewards chosen by the country should not work for themselves, but for the country and its citizens. Separate politics from the government of the country and create dialogue with its citizens,” he said.
Mhlanga said the introduction of bond notes could have unintended effects, such as a decline in savings, as the market will not be prepared to bank using formal financial channels, decrease of money in circulation, thus, increasing liquidity challenges and shortages of foreign currency for importation, as the bond notes cannot be used for imports.
“However, some of the perceived challenges may not necessarily happen or be felt, as the facility is just a drop in the ocean, since it is only 4% of the aggregated bank deposit and will be released gradually without mainly influencing economic environment,” he said.
