Mangudya’s bond notes assurance welcome
EDITOR — The Reserve Bank of Zimbabwe’s assurance that they will not flood the market with bond notes is timely and well received.
Indeed there is no room for careless flooding of the market with money that has not been earned or worked for, as what happened during Gono’s term.
Our Government should not dare that dangerous route at all. Money by nature should mainly be a medium of exchange and store of value.
What this simply means is that where one has not worked productively, no money should be printed to pay that person.
On the part of our Government the urgent need to cut expenditure remains crucial for our economic recovery and the necessary ability to fight sanctions in a sustainable way.
The level of opposition and acrimonious debate on the bond notes hinges on two main reasons. The primary one is the fear of hyperinflation.
The secondary one mainly from the opposition politicians is that any measure that may mitigate our economic plight will give Zanu-PF political capital.
So it is up to our Government to carefully walk the issue of bond notes, to avoid a repeat of what happened with the bearer’s cheques, so that the public will take it as pro bono publico!
The vexed issue of the size of the Government expenditure should be tackled ruthlessly to avoid continued suffocation of the wealth creating private sector.
All students of Public Finance will be told during their first undergraduate lecture that Government expenditure is by nature wasteful. It basically means Government expenditure can be done without necessarily looking at whether it is adding value to the country compared to what is done in private sector entities cost accounting.
In short, Government should not be complacent on its bloated expenditure, because that would expose it to careless money printing again as what happened in the past.
Historically, all countries that experienced hyperinflation never went back to such a situation and looking at this, history appears to be favouring Zimbabwe.
There is no need to panic. Cde Muzvinavanhu