Mnangagwa insists there is no way Zimbabwe will overprint bond notes because this is a tri-partite arrangement

Vice-President Emmerson Mnangagwa said yesterday there was no way Zimbabwe was going to print excess bond notes because this had to be agreed by three parties- the Reserve Bank of Zimbabwe, Afeximbank which guarantees the notes, and the country where the notes are being printed.

“There is a binding agreement between the Reserve Bank of Zimbabwe, Afreximbank and the country which is printing these bond notes that it is only anchored on an amount agreed. No excess, nothing can be done beyond what has been agreed by the three parties,” he told Parliament.

“Even if tomorrow the Reserve Bank (governor) wants to print more than what has been anchored on the facility, he cannot do it because this is done by the three parties to the arrangement,” to which a legislator interjected: “It appears there is something fishy.”

Mnangagwa responded: “There is nothing except to say the fact of the issue is that the bond notes are legitimately a legal tender in Zimbabwe. Those amongst us who feel uncomfortable in using the bond notes should not, and continue using the US$ because the bond note and US$ are interchangeable. So, there is no need for anybody to worry. If you have no faith in the bond note, why do you not continue using the currency which you have faith in?”

Q & A:

HON. P. D. SIBANDA: Speech not recorded, the Hon. Member spoke in Tonga.

THE VICE PRESIDENT AND MINISTER OF JUSTICE, LEGAL AND PARLIAMENTARY AFFAIRS (HON. MNANGAGWA): Thank you Mr. Speaker Sir.  The Hon. Member is concerned about the fact that the bond notes are anchored on a facility which Government secured with the African Export-Import Bank (Afrexim bank).  His concern, if I understood him well, is that is this justifiable to have the bank notes anchored on a facility tantamount to being a loan.

May I advise the Hon. Member and others also, that this is an administrative issue, not a policy issue.  The Reserve Bank Act gives authority to the Reserve Bank Governor do what he has done.  All what is necessary is to make sure that the bond notes are backed by concrete evidence of the amount stated and that is the situation pertaining to the issue of bond notes.  The Governor of the Reserve Bank of Zimbabwe will not issue bond notes in excess of the amount guaranteeing the bond notes in the American denomination United States (US) dollar.

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