HomeBusinessIndustry resists bond notes as Mangudya turns to faith

Industry resists bond notes as Mangudya turns to faith

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RESERVE Bank of Zimbabwe (RBZ) governor John Mangudya yesterday said there is need to “walk by faith”, not by sight in this economy, as economists shot down plans to introduce bond notes as part of measures to resolve the cash crisis.

BY VICTORIA MTOMBA

mangudya

Speaking at the Zimbabwe National Chamber of Commerce cash shortage breakfast meeting in Harare, Mangudya said faith was the missing link in the economy.

“This economy needs you to go by faith because sight says in 2008 we had hyperinflation, sight says in 2008 you let us down. Faith says export facility is self-regulating, it’s not the Reserve Bank of Zimbabwe, it’s the banks who will request the facility. Our purpose is not to have bond notes but to support exporters,” he said.

This is the second time inside a week that Mangudya has gone spiritual after giving a sermon to legislators on Monday that it was not all doom and gloom for the Zimbabwean economy.

Mangudya last week announced a $200 million foreign exchange stabilisation and incentive support facility to provide a 5% incentive on all foreign exchange receipts including tobacco and gold sales proceeds. Qualifying foreign exchange earners would be paid in bond coins and notes, which would be introduced in denominations of $2, $5, $10 and $20. The move to introduce bond notes has raised fears that government wants to revive the Zimbabwean dollar rejected in favour of the multicurrency regime in 2009. The local unit was eventually retired last year.

Renowned economist, Ashok Chakravarti told the meeting Zimbabwe should follow practices that have been implemented before by countries that had more imports than exports.

“The bond issue is not the issue here. Remove the necessity of the bond notes or the return of the Zimbabwe dollar by the back door. Bond notes are the wrong way to go. Make the import tax of 3%, 4% 5% that’s revenues for government,” he said.

Chakravarti said the economy needed to be regulated since it has been over-liberalised leading to the externalisation of close to $2 billion.

He said liquidity would increase gradually if the withdrawal limits start at $200.

Chakravarti said the economy has excess demand, which was fuelled by over expenditure by government.

“Stop printing Treasury Bills (TBs). If you look at demand deposits $4,5 billion and the $2 billion Treasury Bills, you cannot have the TBs control excess demand,” he said.

But Mangudya said TBs were issued to pay the debts of $1,4 billion incurred by RBZ. He said the problem was not of the TBs but that money was not circulating in the economy.

He said the bond notes would not be printed in Zimbabwe and he has no appetite to do any action that jeopardises the economy.

“The money is on request by banks that are doing exports and also the facility they also want to know about it so that what is printed is not above the limits. They (Afreximbank) are a Triple B-rated bank, this is different,” he said.

Economist, Brains Muchemwa said people should not be forced to accept bond notes because the economy was not ready for such a message.

“Zimbabweans are used to putting controls here and there, but history tells us that controls never worked. We have tombstones for controls such as National Income Pricing Commission, parallel market and they all failed. The control mentality never really worked in this market,” he said.

Industrialist, Lovemore Mukono said the government should reconsider the decision to bring bond notes, adding that exporters should instead be assisted by stopping the importation of cheap poor quality products that were finding their way into the economy.

Mangudya said the economists were agreeing on rewarding exporters, but increasing the import duty would mean an increase in prices and inflation.

“If we put 3% import tax on companies, this will increase prices and also bring inflation. We are saying we have listened. Let’s continue engaging so that they see why bond notes are superior to what they are saying. Let’s have bond notes because they have no impact on increasing prices,” he said.

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34 COMMENTS

    • As we work hard trying to be productive solving problems in our lives that you created you just go to the printer and print bond paper and you want to buy goodS dzatagadzira nesimba nedikita. Bond notes might be a good idea but we don’t trust you and we don’t like you. Cash crisis is better than bond notes.

  1. This Mangudya guys is a wolf in sheep skin. How exactly does he want us to use faith when common sense suggest otherwise. I think this guy needs to be educated. he should consult the likes of Lance Mambondiani the CEO of Steward Bank on how to tackle issues like these. Bond notes are NEVER the way to go and small cannot help but wonder how can you rate such a useless piece of paper at par with the green back. No currency in this world is backed by another currency but by precious minerals or metals. Kindly read this so you can get a better understanding of the effects of bond notes.

  2. Mangudya is jus a tortoise on a pole, some1 put him there and should serve the interest of that some1. That some1 will take him off the pole.

  3. Once bitten, twice shy. Tisu tobatiswa masaga ebond notes vamwe vachienda ne bag re USD. Where is the $15 000 000 000?

  4. ‘Speaking at the Zimbabwe National Chamber of Commerce cash shortage breakfast meeting in Harare, Mangudya said faith was the missing link in the economy’……I guess Prophet makandiwa or Magaya should be the Head of State if we need faith to run the economy.

  5. so much loop holes in the system and incompetency from the authorities there. As the mother bank who controls you should have seen it coming.
    Today you are talking of money being externalised, how did it happen whilst you are on duty?

    Whats 200 million in this economy where 15 billion vanishes untraceable.
    We are tired of working for you people to make more money for yourselves..

  6. Faith, Patriotism, Transparency, Honesty, Dignity, Love among st Zimbabweans, No to violence against those opposing Zanu Pf views, Political tolerance, promotion of culture to work hard, re-vamping local manufacturing industry, driving consumption of locally produced goods, making investor friendly policies, monitoring transactions of chinese ie making that they do not externalise funds, transparent elections that are free and fair, arresting anyone corrupt whether small or big, supporting sme projects, re-vamping agriculture, limiting imports where necessary, increasing exports, bringing back $15 billion.

  7. bring back missing 15 billion motipawo hard currency yedu iri muma accounts kwete ma valueless papers emurikuda kutipa ayo

  8. Nyaya yema bond is a very sensitive issue. It brings back memories. So no matter how u try to explain it, we do not want them. I feel the only reason why gvt is pushing for them is for their own benefit. This moves will just frustrate Zimbabweans. Apa zvamakuda kuita can result in the majority going to the street. Lets try to come up with other measures. For example, loosen the policies to allow foreign investment. Zvikarambao izvozvo tozo tryer ma bonds

  9. Lets have faith and leave the cash crisis alone. It will disappear on its own. Pse have faith do not impose bond notes becoz they will not work. Lets pray hard and Zimbabwe will become a land of milk and honey!

  10. Manguja shallow brain, Manguja you hit stonewall,Manguja, say to him who send you $15billion first.Manguja leave this job,Manguja, Lacoste and G40 putseki.

  11. VaMangudya is right we need to have the bond notes. Anyone who is traveling out and need frorex will go kubank like what we use to do in the 90s this will help to bring to book those vasingabhadhare tax like maChina they will be forced to bank mari so vakubhadharavo tax isu mauto totambira zvakanaka.

  12. I get paid £88 every hour from online jobs. I never thought I’d be able to do it but my friend AB is earning £9k /monthly by doing this job and she showed me how.Why not You Try It…M2.…

    ——- w­w­w.E-c­a­s­h­1­0.c­o­m

  13. Once bitten, twice shy. Tisu tobatiswa masaga ebond notes vamwe vachienda ne bag re USD. Where is the $15 000 000 000?

  14. we want bond coin!!!!!!!!!!!!!!!!!!!
    we want bond coin!!!!!!!!!!!!!!!!!!!
    we want bond coin!!!!!!!!!!!!!!!!!!!
    we want bond coin!!!!!!!!!!!!!!!!!!!
    we want bond coin!!!!!!!!!!!!!!!!!!!
    we want bond coin!!!!!!!!!!!!!!!!!!!
    we want bond coin!!!!!!!!!!!!!!!!!!!
    we want bond coin!!!!!!!!!!!!!!!!!!!
    we want bond coin!!!!!!!!!!!!!!!!!!!
    we want bond coin!!!!!!!!!!!!!!!!!!!
    we want bond coin!!!!!!!!!!!!!!!!!!!
    we want bond coin!!!!!!!!!!!!!!!!!!!
    we want bond coin!!!!!!!!!!!!!!!!!!!
    we want bond coin!!!!!!!!!!!!!!!!!!!
    we want bond coin!!!!!!!!!!!!!!!!!!!
    we want bond coin!!!!!!!!!!!!!!!!!!!
    we want bond coin!!!!!!!!!!!!!!!!!!!
    we want bond coin!!!!!!!!!!!!!!!!!!!
    we want bond coin!!!!!!!!!!!!!!!!!!!
    we want bond coin!!!!!!!!!!!!!!!!!!!
    we want bond coin!!!!!!!!!!!!!!!!!!!
    we want bond coin!!!!!!!!!!!!!!!!!!!
    we want bond coin!!!!!!!!!!!!!!!!!!!
    we want bond coin!!!!!!!!!!!!!!!!!!!
    we want bond coin!!!!!!!!!!!!!!!!!!!
    we want bond coin!!!!!!!!!!!!!!!!!!!
    we want bond coin!!!!!!!!!!!!!!!!!!!
    we want bond coin!!!!!!!!!!!!!!!!!!!
    we want bond coin!!!!!!!!!!!!!!!!!!!
    we want bond coin!!!!!!!!!!!!!!!!!!!
    we want bond coin!!!!!!!!!!!!!!!!!!!
    we want bond coin!!!!!!!!!!!!!!!!!!!
    we want bond coin!!!!!!!!!!!!!!!!!!!
    we want bond coin!!!!!!!!!!!!!!!!!!!
    we want bond coin!!!!!!!!!!!!!!!!!!!
    we want bond coin!!!!!!!!!!!!!!!!!!!

  15. Mangudya got book sense and lacks common sense , Its not a mistake to make a mistake , But to repeat it its a mistake, Does his histroy dont teach him. Zim dollar is Zim Dollar dont try to give it a name “Bond Note”. Dont sugar quote

  16. Apa Mangudya can not relive the yesteryear when RBZ, out of its warped policies distributed so called Agriculture Input Support scheme-where a loan for a whole 4×4 CASE tractor ended up being settled by pocket change after buying bread!?

    Mangudya honestly here? Sure here kuti wazvikangamwa? Zuro ndizuro, maTractor akabva kuBrazil anga avakutanga kukushwa futi naGire! Maakupenga here imi vanhu? Musadherere mhomho yevanhu..

    Dilma Rouseff is on the ropes now kuBrazil..we want someone to give a shout to the Brazil authorities to extend their investigations to Zim over the nature of those tractors given to government..tinzwe kuti zvaava kukushwa naGire akauya nehurongwa hwupi?

    Please Brazil mhanyayi munowana equipment yapera, mamwe takaaona akatopiswa just last month..!!

    Hatidi Hyati majaira!

  17. Faith is what we have shown already by staying in these country throughout all these corrupt activities and exploitation at the hands of such a clueless government. #Thisflag zvakwana please no more manipulation taramba

  18. its a really tight situation considering that Mangudya wasn’t responsible for 2008 error… if what he says is true then there is need for faith…what will a PHD man…a Doctor by qualification really gain from repeating the mistakes of Gono..the problem public isn’t ready for trial and error.. if Doctors make such blunders then what’s to motivate the upcoming young learner…

  19. munoda bond coin asi mukuramba bond note chinotimba is right just make $1 $5 $10 $20 bond coin coz ndozvamunoda

  20. @changes you are right is the frame work design you do a pilot program ikaita wotiwedzereyi and Dr John Mangudya did that with coins and zvakashanda and now kwakuwedzerwa just $200 million for now kana zvikaita toyenderera mberi. i have faith in him and imi ndokunyengererayi to do the same and zimbabwe will be back on the roller coaster again. lets be +ve in our mind

  21. we have no faith in whatever desicion our poor government has come up with neither we do have faith in the bond note.This currency was tried and tested some years back and it drastically failed.There is no difference between the old bearer cheque and this bond note.Just change of name but same effect.Its like saying we will change Robert Mugabe’s name to Barracks Obama and expect the economy to recover. No, just a different name but the fool remains the same.
    That’s my take

  22. Bond notes a desperate move. Zanu pf has failed the economy,all these moves are to protect the interest of very few people especially Mugabe. Ladies and Gentlemen lets say if Mugabe says today he is giving up,this issue yemabond inobva yango pera kutaurwa nezvayo…Mugabe and his crew must leave office ndovatisungira play.

  23. Hey hey hey no bond notes please. Bond coins are nothing in overall value as its just a retail shop change issue which wont exceed $1 per person for 13 million of us. Its purely a technicality that bond coins were accepted after initial public resistance because it coincided with the devaluation of all major currencies against the USD not just the rand. This made our USD obsessed punters ditch the Rand by default but no point having a strong USD currency when you have a $4b gap between your $7b imports and your $3b exports. Rand currency in Zim actually makes our imports cheaper to the end user due to price transparency vs SA and it makes out exports more competitive as they are rand based not USD based which is too strong for attractive export pricing. Cash shortage can be solved by plastic money not bond notes. Externalisation can never be eliminated even in the US Economy so focus on production and exports not printing worthless bond notes to finance runaway Govt spending.

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