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NewsDay

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Bond notes have bonded the nation to anguish

Opinion & Analysis
I recall sometime late last year chatting with former Economic Planning and Investment Promotion minister and also Hatfield constituency legislator Tapiwa Mashakada as the scary story of bond notes was slowly becoming a reality.

I recall sometime late last year chatting with former Economic Planning and Investment Promotion minister and also Hatfield constituency legislator Tapiwa Mashakada as the scary story of bond notes was slowly becoming a reality.

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Most people had argued that the government, from its conduct, was actually dragging its feet as it knew the infeasibility of its plans and, hence, was unlikely to introduce bond notes.

However, when the first notes where unveiled, Zimbabweans instinctively knew that trouble was around the corner despite government assurances. With hindsight, Honourable Mashakada may have been on the ball on bond notes when he said: “Quite frankly speaking, the market has absolutely no confidence in bond notes. In the minds of the people, they see the return of the Zimbabwean dollar with all its chilling problems. People are not convinced on the 1:1 parity between the bond notes and the US dollar.” It would not be an exaggeration to assert that bond notes were literally forced down the throats of Zimbabweans against a wide public outcry.

There were tremors of resistance as talk of bond notes gained currency. The scepticism and fear of Zimbabweans was not unfounded. Zimbabweans still suffer from the trauma of 2008 when everyone watched helplessly as the Zimbabwean dollar plummeted to record lows. It was a time of suffering which triggered all manner of vice. Zimbabweans naturally feared the back-door return of the Zimbabwean dollar through bond notes.

Legal applications were filed against the notes at the High Court though in a lost cause. Demonstrations were held in protest. Indabas took place to ward off the threat of bond notes but, ultimately, the government of Zimbabwe found its way against the will of the majority. For some time, bond notes did the trick and shamed “detractors”. It was reported that bond notes were holding their own and this was somehow viewed as reason for celebration. It warranted acres of State media space to declare and pronounce victory of the feared bond notes. It was as if to say the government had been vindicated with the notes standing at 1:1 with the United States dollar.

People did not want bond notes. Fuel shortages showed up at one time as a result of depletion of nostro accounts due to lack of confidence. Bond notes were more of an evil that Zimbabweans were forced to live with. The beckoning reality, however, is very scary: The country may be well on its way to the forgettable year of 2008. Mashakada’s sentiments came flashing in my mind given the fresh wave of the cash crisis. Cash has become something next to gold because of the crisis. And to those who pointed it out, this was a given. This country, literally, has no money. To further quote the former minister’s view: “The Reserve Bank is very sincere, but they are just a pawn in the economic crisis game. All the technical arguments about export incentives are not good enough to convince the ordinary person that they will continue to get their US dollar. Yet the biggest mischief is capital flight, externalisation and rundown on US dollar deposits — all due to lack of confidence. I don’t think the introduction of bond notes cures this mischief. We, therefore, ought to see a paradigm shift in terms of the policies of government.”

Indeed a paradigm shift was and is necessary in government policies. The country made world news for printing its own notes and imposing the same rate with the American dollar. The consequences are becoming direr. Despite the hype about plastic money, surely it can’t be used everywhere and Zimbabweans are bearing the brunt of the ill-fated notes. The government, on its part, is trapped as it cannot introduce higher denominations of the bond notes for obvious reasons. The people are suffering daily as they have to endure long queues. In essence, it is true that bond notes, contrary to the intended purpose, have actually bonded the nation to more suffering. Zimbabwe is a country where the availability of a salary is newsworthy, notably for the civil service where pay dates are paraded every month. It is not always that people who raise concerns are detractors, as the government would like to put it. Bond notes have taken us to the very unenviable situation which many had predicted. It was crucial to have given an ear to those who raised a red flag on bond notes. It’s quite unfortunate that in Zimbabwe people are quick to brand those with divergent views as opposition. There simply was no politics in resisting bond notes. It was a genuine cry of people who know and have witnessed suffering wrought by similar policies in the past.

The question now remains: Whither Zimbabwean government? These bond notes aren’t working. Can someone ameliorate the suffering?

Learnmore Zuze is a law officer and writes in his own capacity. E-mail: [email protected]