Bond Notes Will Hurt Informal Traders More: Lobby Group

By Dylan Murambgi

Harare, November 10, 2016 – THE looming introduction of bond notes into the Zimbabwean economy will hurt informal workers the most, especially those who buy wares from neighbouring countries for resale, the Zimbabwe Chamber of Informal Economy Associations (ZCIEA) has said.

Addressing a press conference in Harare Wednesday, ZCIEA President Lorraine Sibanda said informal workers would find it difficult to trade and interact with their regional partners while carrying “bond paper” as a currency.

The government is pushing ahead with plans to introduce the much resented currency despite spirited resistance from opposition parties, civic groups and the transacting public.

Zimbabweans fear a return to the 2008 hyper inflationary period during which savings were lost when the country was still using the local currency.

Authorities have denied the introduction of bond notes will trigger inflation with Reserve Bank Governor, John Mangudya saying they will not saturate the market with the so-called surrogate currency.

He insists the introduction of the notes was a $200 million export incentive facility, which is guaranteed by the African Export-Import Bank (Afreximbank).

However, the pending introduction of the currency has triggered panic withdrawals by depositors who fear losing their investments, triggering severe shortages of cash across the country.

This has led to banks reducing their minimum daily withdrawals to as little as $20, with depositors at some banks having to sleep in queues as the demand for cash grows.

“In view of the above, ZCIEA as a proponent of human rights and informal workers’ rights, abhors and denounces the introduction of bond notes by the Zimbabwe government as a working currency for Zimbabwe as this will affect the already adversely affected informal economy workers who thrive by crossing borders to go and get goods for resale and also who use the dollar as well as the rand to trade with other country counterparts” Sibanda said.

She said bond notes were not any different from the bearer cheques that were introduced in 2008, adding that they were a form of repression and abuse by government on workers both in the formal and informal sectors.

“It is still fresh in Zimbabweans’ mind how they lost zillions of dollars in the 2008 era when the government dollarised the economy leading to losses by ordinary citizens who had put so much Zim-dollars into the banks,” she said.

“Citizens were encouraged to exchange their foreign currency for the Zim-dollar, for loads and loads of Zim-dollars which we will just call Zim-dollar as a sign of respect but were bearer cheques.

“Those bearer cheques were given to citizens in large numbers but the true fact is they were at the end of day, not useful to anyone. And to date even as government and powers that be move to introduce the bond notes there has been neither restitution nor consultation of the ordinary citizens to engage people on the loss they suffered back then and to chart a way forward together with the citizens.”

Sibanda said government should not treat workers as objects which it could use and discard.

“We are not cows which they can milk for USD and rands and exploit and give us useless paper. Our government might forget but we as workers and ordinary citizens will not forget. Among the disadvantaged were government employees who even lost their pensions to the dollarization; so as the government moves to implement change, they should have a fall back plan to say this is how we are going to provide soft landing to protect citizens from strong repercussions and effects of transitioning from use of real money to use of the bond paper.” she said.

She proposed the use of the rand, arguing that it would not be as scarce as the USD as South Africa was a neighbour with whom Zimbabwe had very cordial relations.