‘Mangudya, Chinamasa lied over bond notes’

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FORMER Finance minister Tendai Biti has accused his successor, Patrick Chinamasa and Reserve Bank of Zimbabwe (RBZ) governor, John Mangudya of lying that the bond notes were meant to address the cash crunch, yet it was a clandestine way to replace the $1,8 billion illegally withdrawn from the central bank’s Real Time Gross Settlement (RTGS) balances to monetise government expenditure.

BY BLESSED MHLANGA

Tendai-Biti

Biti, leader of the opposition People’s Democratic Party, told delegates at a Crisis in Zimbabwe Coalition public meeting in Harare last week that the proposed $200 million bond notes were being introduced to cover the shortfall caused by the illegal
transaction.

“So what has happened is that given the shrinking revenue and the increasing appetite of expenditure, the government has had to look somewhere to finance its recurrent expenditure,” he said.

“The government has gone and raided the RTGs balances at the central bank, so when you want your money, the bank then orders that money from the RBZ, and when that happens the, central bank can’t give the bank your money because it’s physically not there, because someone has raided that money to finance recurrent expenditure. The government has raided banks for the $1,8 billion. This is why something that is dramatic must happen, which is to bring back the Zimdollar.

“Mid-term last year, Chinamasa revised the budget from $4,1 billion dollars to a budget of $3,5 billion. When he revised the revenue figures downwards, he did not also revise the expenditure figures downwards. Expenditure has actually increased in an expenditure budget to $5 billion.”

Biti said employment costs were now at 91% of total expenditure and President Robert Mugabe’s appetite to travel has put a strain on government recurrent expenditure and, therefore, forcing the liquidity crunch.

However, Mangudya yesterday dismissed Biti’s claims, saying the RTGS system was intact and no money was raided by government.

“There are no challenges with the movement of RTGS transactions in Zimbabwe. We actually encourage the banking public and businesses to make their payments using RTGS and plastic money and only use cash as an exception,” he said.

“I think the former Minister of Finance was misquoted on the RTGS figure of US$1,8 billion since there is no relationship between the cash shortages at some banks with RTGS balances of the banking sector, which stand at around US$750 million. Cash used in Zimbabwe is withdrawn from nostro accounts and not RTGS.”

Mangudya said due to the continuous withdrawal from the nostro accounts to meet high import and cash demands, it was essential that the country is transformed by encouraging more exports to replenish their nostro accounts.

“The statement attributed to the former minister seems to be a denial of the fact that the major reason for the cash shortage in the country is due to the haemorrhaging effect of hoarding and exernalisation of cash,” he said.

“What this means is that once cash is withdrawn by banks from their nostro accounts and imported into the country, that cash is not efficiently circulating within the national economy. It’s being drained from the economy by those hoarding or externalising it.”

36 COMMENTS

  1. This makes sense.There is no smoke without fire. The govt withdrew a huge amount of USD from the Banks’ Nostro Accounts triggering the current Cash Crisis. Mangudya must explain why the Cash Crisis was so sudden? The govt after causing a deep hole in the Nostro Accounts is seeking to print bond notes to replenish the Accounts thru seignorage. That is why RBZ is now saying it wishes to print the bond notes temporarily. Tendai Biti has hit the nail on the head. The $200 million guarantee for the bond notes is fake. We must reject these bond notes outright b4 we are taken back to the 2008 era.

  2. Anozvizviva biti coz aizviitawo nguva yake vachi kurumbidza kudzosera mari dzevanhu now with these guys havazo dzosera

  3. Zulu u are 100% correct! Mangudya must explain what happened to the Nostro Accounts and the RTGS system. Why does RBZ now want to print the bond notes temporarily? It is becoz they want to raise revenue thru printing bond notes. Revenue collections have been declining and therefore failing to meet recurrent expenditures so they have to find another avenue to finance the growing deficit. Instead of reducing total recurrent expenditures govt wants to print money. The export subsidies and externalisation fake stories are meant to conceal the truth. Afreximbank and IMF should issue press statements explaining whether or not they have approved this bond note facility? We want the truth on this issue. Period.

  4. they paid the IMF,over a $1bn indeed from the nostro accounts,but they did not antiscipate this shortage ,further they hoped the payment would open more funding nothing came.so they faced a shortage and had to print to fill the gap.

  5. Biti you now have my vote,,,,at least you’ve managed to open up the secrets of these people

  6. kkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkk so what takuziva zvakaitika toita seii cause doesn’t make sense kuty tozviona toshaya zvekuita these people have been a kleptocratic government since 1980 toita seii is the way forward

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  8. What Mangudya hasn’t explained is how, if government didn’t raid nostro accounts, Chinamasa is financing the gap created by falling revenues.

    • Better titongwe naye because he is very powerful. More powerful than your sitting president with degrees in violence ha ha ha!

    • Stupid idiot sanctions don’t have anything to do with this a government with no good investment policy. You need exports chete to get foreign currency whether you export to South Africa or Zambia as long as you export more goods than you import at a good price you never run out of cash

  9. Bond notes will note bring the solution that Zimbabwe deserves. We need to do away with corruption,working hard, promote local SMEs, promote agriculture, revamp the ailing local manufacturing industries, support youth and women projects, avoid persecuting those with opposing or divergent political or economic views, stop threatening one another with death, violence or disappearance, promote consumption of locally produced goods, reduce imports where necessary. Love one another as Zimbabweans and believe and trust in the Lord. Zimbabwe is a beautiful county that belongs to us all.

    • Zanu PF will never want to implement any of your positive solutions, they belive in stealing, cheating and blackmail.

      Zimbabwe may be beautiful but the ordinary people are getting hangrier by the day. (Hungry + angry = Hangry).

  10. mangudya na chinamasa vanofunga kuti isu hatifunge manje chitsotsi chavo tinochiziva vakudakutsvaga mari ye campaign yemaelections

  11. My only worry is RBZ stopping imports.That is worrisome.banks wr able to pay for imports on their own,now I hear they have to go thru rbz,which is now not processing any Invoices on imports.that is worying.yu dont ban a product yu cant replace.let market forces deal wth that as was hapening.why ban banks from paying imports ,when yu cant pay them yoself.This Mangudya needs to relook.otherwise bond note is doomed ,if yu dnt speed up payments on imports.

  12. I knew that this bond note dilemna was never a liquidity issue because,

    1. Last year in 2015,RBZ ordered all banks to reduce their Nostro account balances and transfer all that money into the RTGS system, this means that the RTGS system had more money than ever. The question is…Where did all this money go if it was not taken by the govt for its recurrent expenditure??

    2. The gvt has been broke for a while now, late last year they were failing to pay salaries on time, surprisingly this year they have been paying on time,quite surprising because, this year should have been worse, which means they got some money from an unusual source to bail them out.
    It is an unfortunate thing that this GVT is hiding behind this liquidity crisis when they have an even bigger problem…being broke.

    3. The gvt is testing the waters for an eventual ZWD return,one thing for sure is that they can’t return all this money they took from the RTGS system now. They are still failing to repay the looted monies from Gono’s era.

  13. biti participated in similar or like activities. He is now exposing the minister and governor for political gain only. It’s not a desire to see things done differently or correctly.

  14. the good thing is everyone- including vakavhotera zanu tiri kuona moto and the sad thing is some people are dumb enough so as to continue voting for the same people after being given a T shirt parally….come on mhani- hatidyi maT-shirt!!!!!!! come next election these zanu thugs should not be voted into office

  15. I think Mangudya explained clearly. “There are no challenges with the movement of RTGS transactions in Zimbabwe. We actually encourage the banking public and businesses to make their payments using RTGS and plastic money and only use cash as an exception,” he said.

    “I think the former Minister of Finance was misquoted on the RTGS figure of US$1,8 billion since there is no relationship between the cash shortages at some banks with RTGS balances of the banking sector, which stand at around US$750 million. Cash used in Zimbabwe is withdrawn from nostro accounts and not RTGS.”

    Mangudya said due to the continuous withdrawal from the nostro accounts to meet high import and cash demands, it was essential that the country is transformed by encouraging more exports to replenish their nostro accounts.

    “The statement attributed to the former minister seems to be a denial of the fact that the major reason for the cash shortage in the country is due to the haemorrhaging effect of hoarding and exernalisation of cash,” he said.

    “What this means is that once cash is withdrawn by banks from their nostro accounts and imported into the country, that cash is not efficiently circulating within the national economy. It’s being drained from the economy by those hoarding or externalising it.”

    DISPUTE THE ABOVE STATEMENT FACTUALLY. DIG DEEP Mr Mhlanga so we get to know who is telling the truth between the Governor and Mr Biti.

  16. ….Now it makes sense….. Biti might have exaggerated the figure for political mileage but it somehow makes sense… Mangudya is also right as he is doing his job …. a bond in finance means indebtedness, that’s why we talk of government bonds when the government is borrowing…. Bond notes are going to fund gvt expenditure through us receiving bond notes and the government using our USD … in other words the government is borrowing at 0% interest .. thereby reducing their transaction costs …. oooooh I see ….

  17. Really, we are not addressing the CAUSE of all this nonsense. Mugabe and the government ARE the cause. So clearly and simply they must go. Why must 12 million people suffer at the hands of a few thugs?
    They must change their ways. Someone much more powerful is WATCHING their every move and thought. GOD is in control and He will sort these people either in this life or the life hereafter. Remember – eternity is a long long time to suffer. I strongly suggest you who are responsible for all this suffering – and you know who you are – change your ways whilst there is still time.

  18. Biti’s claim makes sense. Never trust a serpent. This is a government of efficient prolific liars. They are already invading private accounts as in the Gono era.

  19. So when you send your US$ from New York or London they just pay your old mom in Nembudziya in useless bond notes and keep the DOLLARS. That’s the ‘Diaspora Plan”. As a result diasporans will be funding the oppression machine and killing their own parents…..Very ingenious indeed!

  20. How about using all our energy to pray coz knowledge of finance,economics etc has proven not to work in our beautiful country ,i encourage Zimbabweans to use more of our knees not our mouth

    • We don’t need knowledge of finance or economics here. Not even knees. Let’s boot the guys out of power whilst we still have the energy to pray.

  21. Goodbye to investors noone will stand for such mari inoguma kusevenza paborder se network… all the investors who had come into Zimbabwe will be gone in a flash… Zimbabwe will never be a country to invest in their policies change each day the Zanu Idiots are on it again mxm!!!

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