THE Confederation of Zimbabwe Industries (CZI) has said there is need for further consultations and repackaging of bond notes, as negative sentiment around their introduction was too high and could not be wished away.
BY VICTORIA MTOMBA
In an interview yesterday, CZI president Busisa Moyo said the measure should be counterbalanced with a “spend side” initiative so that recipients of bond notes know where to spend them. He said the bond can be used in one specific sector of the economy and remain in that sector. For instance he said, they can be used in the fuel sector and they will be issued as fuel coupons.
“Our view is that the negative sentiment is way too high to introduce the bond notes, as they will not be accepted in the multi-currency set up and exporters will be stuck with the notes, which no one else in the economy is willing to accept,” he said.
The export incentive should also have thresholds for it to increase the $4 billion on current exports. So if an exporter increases exports by 50% per quarter he should get more than an exporter who has been exporting anyway. This is what grows the cake and is the whole point of an incentive.”
Moyo said the central bank can retract the statement on the introduction of the bond notes and leave the facility to be a manufacturing and value addition import-export support facility that encourages value addition and exports.
“Encourage wider use of rands in the economy by issuing a revised supplementary budget in rand, government payments, remittances and taxes to be received in rands. The rand is less susceptible to being a target by foreign companies, money launderers and terrorists unlike the United States dollar. This will also allow the country to benchmark its costs, charges and levies against its strongest competitors for the local market and biggest trading partner and devalue through the use of a softer currency”he said.
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On Saturday evening, Reserve Bank of Zimbabwe governor, John Mangudya said bond notes will be launched in October this year.
Mangudya said the introduction of bond notes should not be mistaken for the return of the Zimbabwean dollar but as an export incentive to assist exporters. He also said the process to go through security documents for the introduction of the notes will take about five months.
Local economist, Ashok Chakrvarti said the move can help prepare the public for the issuance of the bond notes although he is not in favour of the new notes.
