MDC-T calls on government not to introduce bond notes because they spell disaster

Full statement

Tuesday, 27 September 2016

Bond notes will spell disaster for Zimbabwe's economy

The MDC, as a social democratic political party that has always identified with the plight of the poor and down–trodden of society, is deeply concerned and indeed, extremely saddened by the ZANU-PF regime’s stubborn insistence on introducing the use of bond notes later next month.

John Mangudya, the Reserve Bank of Zimbabwe Governor, in his monetary statement that was published a few days ago, openly admitted that Zimbabwe’s financial health is very depressing and disturbing. The RBZ Governor disclosed that at the moment, the country has less than one month’s import cover by way of foreign currency reserves.

To his credit, the RBZ Governor disclosed that by way of international best practice in terms of macro-economic and financial stability, only countries that have got a minimum of twelve months’ import cover by way of foreign currency reserves, should be able to adopt and use their own local currencies. Simply put, therefore, it will take many, many years before Zimbabwe can be able to re – introduce its own currency. Our national financial situation is dire.

Against all financial and economic logic, the ZANU-PF regime has decided to introduce bond notes into the financial system. No rocket science is needed to appreciate the fact that the introduction of bond notes will wreck havoc with our economy. It is a notorious fact that Zimbabwe is importing not less than 75% of all its industrial, manufacturing, agricultural and food requirements. This effectively means that we are a net importer of goods; including food such as our staple food, maize meal. In order for the country to import food and other essential goods, we badly need hard currency. Bond notes are not hard currency.

The position of the MDC regarding the introduction of bond notes is very clear and unambiguous. We are deeply opposed to the introduction of this worthless currency that is, in fact, the much discredited Zimbabwe dollar by another name. In this respect, therefore, the MDC is in full support of the various political parties and other Zimbabwean business-people who have decided to take legal action against the introduction of bond notes.

Bond notes will certainly cause untold suffering amongst the majority of the people of Zimbabwe. As a political party with the interests of the people at heart, the MDC would like to call upon the ZANU-PF regime to call off the introduction of bond notes into our financial system. These worthless bond notes will inevitably lead to increased shortages of essential goods in the country simply because most, if not all, importers, will not have access to the hard currency that is needed in the import and export of goods and services. We strongly suspect that the bankrupt and faction – ridden ZANU-PF regime harbours a very sinister motive pertaining to the introduction of bond notes.

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