Bond notes to spur consumer spending: CZI
THE Confederation of Zimbabwe Industries (CZI) says consumer spending is likely to improve during the festive season on the back of the introduction of bond notes into the economy.
The Reserve Bank of Zimbabwe is set to introduce bond notes in two weeks time as part of measures to incentivise domestic production and increase export earnings.
The new notes will improve liquidity in the economy and curb externalisation on the back of cash shortages.
Since April this year, the economy has been experiencing cash shortages with the central bank attributing the trend to illicit financial leakages on the market.
Although the monetary authorities have encouraged the transacting public to use plastic money and other electronic payment systems, cash shortages have dampened consumer spending.
CZI vice president Mr Sifelani Jabangwe told Business Chronicle yesterday that in the absence of cash coupled with other challenges presently obtaining, consumer spending this next festive season was envisaged to be lower than the previous years.
He said CZI, however, pinned hopes on the introduction of the bond notes to ease the cash crisis and subsequently stimulate consumer expenditure during the festive season.
“In the absence of cash transactions, transactions are actually very low but we have some hope that if bond notes are introduced that will spur consumer demand during the festive season,” Mr Jabangwe said.
e bond notes, which are guaranteed by a $200 million African Export and Import Bank loan facility, are expected to start circulating in the next two weeks.
RBZ Governor Dr John Mangudya has said the bond notes, which would be in denominations of $2, $5, would be at par with the United States dollar.
Mr Jabangwe said in the previous festive season, consumer spending was depressed largely due to the drought situation that hit the country.
During this festive season, he said, some of the locally manufactured basic commodities would be competitively available on the market following the promulgation of Statutory Instrument 64 of 2016, which removes several goods from the Open General Import Licence.
In light of SI64/2016, local firms whose goods are listed under the legal instrument were on course to consolidate their production capacities.
Cooking oil, coffee creamers, dairy products, iron and steel products as well as hardware material such as cement are some of the products listed under SI64/2016. — @okazunga