Bond Notes: Hurricane Mangudya on the horizon

By Tichatonga Mangwana

There are two fears engulfing Zimbabweans at the moment: speculation over the imminent arrival of bond notes and, second, their actual arrival.

But now that bond notes are going to be launched after the due process of consultation its crucial that the many questions people have be addressed.

Going through the consultation route might mean a delay, but also most probably the mafia government is developing cold feet, or it could that the “hengechepfu” faction is still unsure about the implications of introducing the surrogate currency.

What makes the whole bond note scum creepy is that the country is being forced to have faith and trust in a government and RBZ that is notorious for being dishonest and penchants of double dealings. The RBZ and government need to fully explain, elaborate and clarify the fears the citizens have over bond notes.

Huge Bill boards have already been erected along major roads in the capital screaming”1:1. Bond note ne UDS gedye gedye.” We know it`s not true and it`s not possible. If the bond note are at par in value with the USD, why then force it upon people? According to the gazetted RBZ Amendment Bill 2016, people who deface bond notes could face imprisonment of up to seven years!

Most worrying is that the RBZ is refusing to say that the bond note is a currency, yet workers are going to receive part of or their full salary in bond notes. If bond notes are not a currency, what is it then?

If RBZ on their bill boards are saying “Bond notes and USD gedye gedye 1:1”, are they not giving the bond notes a value, therefore making it a currency? Why is the government afraid to label bond notes a currency when we all know they are indeed a currency?

Is government going to pay its workers with something that’s not a currency? Why is a school teacher going to get his salary in bond notes if he has not an exporter? What will happen to his actual USD in his account if, on pay day, he gets bond notes from the ATM or over the counter? The answer is obvious: ZANU PF is going to loot this poor civil servant`s USD account, take all the greenbacks and their value, and give the poor man bond notes. Are poor government workers exporters? Is the RBZ and government not robbing people of their money?

Even as the bond notes` launch is fast arriving, there are a myriad of questions that still need explanations. If the introduction of bond notes is meant to be an export incentive, why will non-exporters still have to be part of this? Is export incentive a true description of the surrogate currency? If the goal of the whole scheme is to increase foreign currency inflows by incentivizing exporters, why are exporters being rewarded for their hard work and efforts by paying them 5% of their exports in bond notes (which the government and RBZ agrees is not a currency) and not in US dollars? Does this make sense at all? How is it an incentive that you export, bring in foreign currency; and you get paid in bond notes?

There are far better ways of incentivising and rewarding exporters. Why not, instead of introducing a surrogate currency, reward exporters by introducing VAT refunds for exports?

Mangudya and Chinamasa are at pains to explain that the bond notes are backed up with a USD 200 million Afreximbank facility. But the question is, what happens when the US$200mil is used up, that is, when exports reach US$200 mil (Zimbabwe`s total value of exports (FOB) in 2015 is US$ 2,704 million)? Will Mangudya and Chinamasa roll up another set of plan, or will that be it? Will that signal the beginning of the feja-feja casino economy of 2008?

Because the bond note cannot be 1:1 with the USD, what plans has Mangudya put in place to curb exchange manipulation on the black market? Also, Mangudya says that an exporter is credited with 5% of invoiced/exported goods. This means an exporter is awarded 5 cents of every dollar exported. What measures has Mangudya put in place to curb over invoicing?

Zimbabweans are distrustful of Mangudya and his RBZ mafia when he says the $200 mil will mature when exports reach $6bn. Because mathematically this means Mangudya needs $300 mil (at 5% incentive or 5 cents/dollar gained from exports) and not $200 million, the whole scheme is a scum. Where will Mangudya get the $100 million difference? Is the regime going to print more bond notes?

People should just reject the bond notes because this is a serious scam driven by RBZ and ZANU PF crooks. Remember Gono’s rejected 100 trillion? This is primitive accumulation of capital by the RBZ and ZANU PF. The RBZ fooled people in 2008 and this time people should not wait for hurricane Mangudya to sweep them away like before. The RBZ and ZANU PF have such a tremendous bad record that no one will ever have confidence in bond notes. With all currencies, it`s all about confidence.
Reserve Bank of Zimbabwe Governor Dr John Mangudya
Tichatonga Mangwana is a researcher based in Nairobi, Kenya, at the Institute of Research for Development. He can be reached at

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