GOVERNMENT’s decision to introduce bond notes as a stop-gap measure against debilitating cash shortages has jolted main opposition MDC-T leader Morgan Tsvangirai to summon his party’s shadow cabinet to an emergency meeting today as he threatened to mobilise for mass demonstrations to stop the move.
This came as Reserve Bank of Zimbabwe (RBZ) governor John Mangudya yesterday assured Parliamentarians that the apex bank had imported $15 million to end the cash crisis, among several other measures.
But Tsvangirai in a statement yesterday said his actions had been triggered by government’s decision to “bring back the Zimbabwe dollar through the back door”. He said his party would do all it could to block the move, saying “Zimbabweans have walked this road before” and would not allow a recurrence.
“The MDC-T is preparing a robust political response to this madness and the party reserves its right to mobilise the people against this ill-advised decision that is certainly not backed by economic logic. Zimbabweans have fresh memories of the traumatising experiences with the ‘bearer’s cheques’ of 2008.
“The so-called bond notes, with a value of up to $20, signify a return to the stressing national times of eight years ago,” Tsvangirai said, referring to the hyper-inflationary era that rocked Zimbabwe a few years ago leading to the official adoption of the multi-currency system in 2009.
He added: “Ordinary Zimbabweans lost their savings, pensioners lost their life-time savings and companies and other institutions were shortchanged as the economy tumbled until the MDC-T presence in an inclusive government brought stability and unprecedented economic annual growth figures, which peaked at 12% in 2012. One cannot mask illegitimacy under the veil of bond notes that are essentially a sanitised version of ordinary bond paper or newsprint.”
The former Premier also said the Zanu PF administration was suffering the effects of lack of legitimacy following its “2013 electoral theft”.
The threats of fresh protests came at a time the MDC-T was still basking in the success of its well-attended anti-corruption demonstration held in Harare last month.
The Lovemore Madhuku-led National Constitutional Assembly has also threatened to mobilise citizens to reject the proposed bond notes.
But Finance permanent secretary Willard Manungo yesterday told anxious Gweru residents during a consultative meeting on the Interim Poverty Reduction Strategy that it would be irresponsible for government to return the Zimdollar.
“The fear that is raised by participants is a situation where their savings and earnings are suddenly overnight undermined by an instrument (Zimdollar) that has inflationary elements,” Manungo said. “I would want to reassure you, and as the Honourable (Finance) minister (Patrick Chinamasa) has said and as the governor (RBZ) has said, we are not yet ready for a return of the Zimdollar,” Manungo said, adding factors such as “investor, community and household confidence” were key enablers to government’s decision-making on fiscal issues.
Former Finance minister and opposition People’s Democratic Party leader Tendai Biti has also warned that the printing of bond notes announced by Mangudya spelt doom for the country’s already fragile economy.
Meanwhile, National Vendors’ Union of Zimbabwe leader Stern Zvorwadza said they had mobilised their members to stop using the traditional banking system until the value of the bond notes has been clarified.
“Until such a time the RBZ assures the nation that our money will not be wiped out as happened in 2008, we will not encourage our members to use banking facilities because we know that our hard-earned cash would be reduced to nothing,” he said.
“More so, the announcement that 40% of every new receipt in US dollars would be converted into (South African) rands, we are not comfortable with that move. We want to make it clear that it is illegal, hence we will not use the banks.”
Renowned economist John Robertson warned that the introduction of the bond notes would have devastating effects on the economy, adding the possibility of government going into “print mode” was high.
Mangudya last Wednesday said government would in the next two months introduce $200 million worth of bond notes in denominations of $2, $5, $10 and $20, to add to the family of bond coins currently in circulation to ease the cash crisis. He, however, was quick to say the printing of bond notes would remain within the realm of the $200 million Afrexim Bank facility availed to Zimbabwe as anxiety grew over the possible return of the country’s comatose currency which was pulled off the market when government introduced the multi-currency system in 2009.
Yesterday, Mangudya told parliamentarians: “We are expecting to have the long queues in banks coming to an end by the end of the week. We have imported money to deal with that.
“More so, the bond note is equivalent to the US dollar and when someone wants to go outside, they just do as they have been doing with bond notes (to) change them and get the US dollar. I don’t see why people should be panicking.”
He added: “People are taking the US dollar and hoarding it with some exporting. Our borders are now porous so we are trying to solve that. Each time we put new money in the market we don’t see it coming bank. So the $200 million we sourced will not help much if we inject it as the US money into the economy. You know who is taking the money, I don’t want to mention names here, but you know. We are saying the bond note is just as good as money and if you look at it, Mr Chairman, most people who are complaining are the ones who have been taking the money outside the country.”
Chairman of the Parliamentary Portfolio Committee on Finance and Economic Development Terrence Mukupe named Vice-President Phelekezela Mphoko’s Choppies Supermarket group as one of the companies taking the US dollar to South Africa, yet doing nothing to improve the situation home. “What are you doing to companies like Choppies that are taking out cash outside the country to South Africa and Botswana and buy goods in rands . . . bring them in and loot money?”Mukupe asked.
In his response, Mangudya said: “You are very brave to mention names . . ., but that’s why we are bringing the bond notes. We will not listen to armchair critics who see doom in our country.”
The central bank boss had to go spiritual to convince the MPs that it was not doom and gloom for Zimbabwe as he quoted Jeremiah 29:10 to stress the point that God had a plan for Zimbabwe.