Mangudya bets job on bond notes
RESERVE Bank of Zimbabwe (RBZ) Governor Dr John Mangudya says he is ready to resign from his post if the bond notes strategy fails. Zimbabwe is expected to start using bond notes next month as part of the central bank’s export bonus s cheme aimed at stimulating production while maintaining and sustaining the multi-currency system, which the country adopted in 2009.
The bond notes are backed by a $200 million African Export Import Bank (Afreximbank) nostro stabilisation and export finance facility.
The move is also expected to ease cash shortages blighting the economy and deal with the problem of money laundering and externalisation.
Dr Mangudya, in an engagement with players in the mining sector in Zvishavane last Thursday, allayed fears over the use of bond notes and assured the nation that the strategy would impact positively on the economy.
“I know people went through difficult times in 2007-8 but this is different. On this matter (bond notes), the buck stops here. We do not want this idea of giving people problems, which I make myself,” said Dr Mangudya.
“Give us a chance to do what is right for this economy, to put it back on track. If these policy measures fail, if the bond notes do not work out, I’m willing to resign because I am genuine about getting the economy back on track.”
The apex bank chief said while pessimists were looking at the end result of the bond notes and thinking it was a back-door way of re-introducing the Zimbabwean dollar, he was looking at the intrinsic value of the policy, which was to increase production and foreign currency earnings in Zimbabwe.
Dr Mangudya challenged accountants and lawyers to form an independent board, which would monitor the circulation of the bond notes, so as to ensure transparency, accountability and that the amount specified, $200 million, would not be exceeded.
He also said he was “very serious and sincere on the rebuilding of the country’s economy” and appealed for support from all Zimbabweans.
He said there was a need for increased domestic production by different sectors of the economy that would be supported by the Buy Zimbabwe Campaign, a concept championed by Munyaradzi Hwengwere and his associates in support of consumption of local products and services.
The bond notes would be issued at par with the US$ in the same manner the bond coins have been operating. This, therefore, means the bond notes will have the same value as the United States dollar.
Bond notes derive their value from the nostro stabilisation and export finance facility, which caps the amount of bond notes to be issued.
As such, the bank cannot issue bond notes in excess of that amount. Furthermore, the apex bank has said it will not issue bond notes when there are no exports. — @BiancaMlilo
Dr John Mangudya