Bond notes to spur con­sumer spend­ing: CZI

Chronicle (Zimbabwe) - - Business Chronicle - Oliver Kazunga

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

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